Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $53,600, lasts 9 years with no salvage value and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. a. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $ AWB = $ Which should be selected? (Investment A; Investment B) b. What must be Investment B's cost of operating expenses for these two investments to be equivalent? $

Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $53,600, lasts 9 years with no salvage value and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. a. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $ AWB = $ Which should be selected? (Investment A; Investment B) b. What must be Investment B's cost of operating expenses for these two investments to be equivalent? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8.24 The Ecology Group wishes to purchase a piece of equipment for various metals recycling. Machine 1 costs $123,000, has a life of 10 years, an AOC of $5000, and requires one operator at a cost of $24 per hour to process 10 tons per hour. Machine 2 costs $70,000, has a life of 6 years, an AOC of $2500, and requires two operators at a cost of $24 per hour for each operator to process 6 tons per hour. a. Determine the breakeven tonnage of scrap metal at i = 7% per year and select the better machine for a processing level of 1000 tons per year.
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative.AWA = AWB = Which should be selected? What must be Investment B's cost of operating expenses for these two investments to be equivalent? $
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $50,100, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $80,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. a. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $ -119375 AWB = $ Which should be selected? (Investment A; Investment B) Investment B b. What must be Investment B's cost of operating expenses for these two investments to be equivalent? $ Round your answer to 2 decimal places. The tolerance is ± 10. -99691
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $54,900, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $83,000.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. a. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $ AWg = $ Which should be selected? (Investment A; Investment B) Investment B b. What must be Investment B's cost of operating expenses for these two investments to be equivalent? $ Round your answer to 2 decimal places. The tolerance is + 10. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table.
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $54,900, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $83,000.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative.AWA = $enter a dollar amount AWB = $enter a dollar amount Which should be selected? (Investment A; Investment B) select an investment What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
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What are the Flaws in Project Ranking by IRR?