Question 10 5. A firm has invested $50.000 in equipment with a 5-vear useful life, The machinery will have a salvage value of $5,000 The anual benefits from the machinery are $13,000 for the first year and increase by $2,000 per year, Assume a combined 30% income tax rate, and the fim uses the SOYD depreciation. (a) (10 pts) Calculate the before-tax IRR. O 16.7K/year O 18.9%ydar O 204/veat O 218%/year Question 11 (b) (10 pts) Calculate the after-tax IRR.

Question 10 5. A firm has invested $50.000 in equipment with a 5-vear useful life, The machinery will have a salvage value of $5,000 The anual benefits from the machinery are $13,000 for the first year and increase by $2,000 per year, Assume a combined 30% income tax rate, and the fim uses the SOYD depreciation. (a) (10 pts) Calculate the before-tax IRR. O 16.7K/year O 18.9%ydar O 204/veat O 218%/year Question 11 (b) (10 pts) Calculate the after-tax IRR.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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