Question
You are requested to provide recommendation to acquire one of the two production packaging equipment with the following comparative data: Details Machine 1 Machine 2
- You are requested to provide recommendation to acquire one of the two production packaging equipment with the following comparative data:
| Details | Machine 1 | Machine 2 |
| Initial Investment | $ 100,000 | $ 80,000 |
| Annual Revenue | $ 40,000 | $ 36,000 |
| Annual Cost | $ 20,000 | $ 18,500 |
| Salvage value | $ 8,000 | $ 6,000 |
| Life, years | 7 | 7 |
This is an asset class with a 5 year depreciation recovery period on the MACRS table. Assume effective tax rate of 40%, and an after tax MARR of 8%. Perform after tax PW analysis on spreadsheet to make your recommendation.
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Essentials Of Real Estate Finance
Authors: David Sirota, Doris Barrell
14th Edition
1475428391, 9781475428391
