Question 8 Part G A large company is planning to purchase equipment costing $220,000 and will depreciate it fully using straight-line depreciation over 8 years. The company expects that the investment will have an annual benefit of $54,000. Each use of the equipment will also provide a benefit of $25. In 5 years, there will be no salvage value for the equipment. The company's combined marginal tax rate is 24%. Based on 12% after-tax MARR, how many uses of the equipment must the company have each year in order to justify its investment? Question 8 Part G: What is the correct break-even equation setup? Group of answer choices a. -220000(P/A, 12%, 8)+20140-19X = 0 b. -220000(P/A, 12%, 8)+47640+19X = 0 c. -220000(A/P, 12%, 8)+47640+31X = 0 d. -220000(A/P, 12%, 8)+47640+19X = 0 i got option b, wondering why its wrong
Question 8 Part G A large company is planning to purchase equipment costing $220,000 and will depreciate it fully using straight-line depreciation over 8 years. The company expects that the investment will have an annual benefit of $54,000. Each use of the equipment will also provide a benefit of $25. In 5 years, there will be no salvage value for the equipment. The company's combined marginal tax rate is 24%. Based on 12% after-tax MARR, how many uses of the equipment must the company have each year in order to justify its investment? Question 8 Part G: What is the correct break-even equation setup? Group of answer choices a. -220000(P/A, 12%, 8)+20140-19X = 0 b. -220000(P/A, 12%, 8)+47640+19X = 0 c. -220000(A/P, 12%, 8)+47640+31X = 0 d. -220000(A/P, 12%, 8)+47640+19X = 0 i got option b, wondering why its wrong
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question 8 Part G
A large company is planning to purchase equipment costing $220,000 and will depreciate it fully using straight-line depreciation over 8 years. The company expects that the investment will have an annual benefit of $54,000. Each use of the equipment will also provide a benefit of $25. In 5 years, there will be no salvage value for the equipment. The company's combined marginal tax rate is 24%. Based on 12% after-tax MARR, how many uses of the equipment must the company have each year in order to justify its investment?
Question 8 Part G: What is the correct break-even equation setup?
Group of answer choices
a. -220000(P/A, 12%, 8)+20140-19X = 0
b. -220000(P/A, 12%, 8)+47640+19X = 0
c. -220000(A/P, 12%, 8)+47640+31X = 0
d. -220000(A/P, 12%, 8)+47640+19X = 0
i got option b, wondering why its wrong
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