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You purchased an airplane for $450,000 and will depreciate it using a 7-year MACRS with a 5-year life. Salvage value in year 5 is expected
"You purchased an airplane for $450,000 and will depreciate it using a 7-year MACRS with a 5-year life. Salvage value in year 5 is expected to be $176,000. The airplane is expected to increase revenues by $144,000 per year. However, O&M costs are expected to be $29,000 per year. Your company is in the 21% tax bracket and your MARR is 18%. What is the Net Present Worth of this investment?"
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