Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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A chemical project with a fixed capital investment without land of $200,000. The 
operation of the chemical project starts at the end of year 1 with 8-years of project lifetime. 
The estimated revenue per year is $90,000, the estimated cost of manufacture without 
depreciation over the project lifetime is $25,000/yr, and the taxation rate is 40%. 

a. Please determine the yearly depreciation values using the standard MACRS method 
assuming surplus value of $5,000. 
b. Please determine the net profit for operation year 1, 5, and 8.

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Managerial Economics: Applications, Strategies an...
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ISBN:9781305506381
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