Project Section 4: You are considering buying an industrial equipment whose price is given by 285000 The equipment isexpected to earn an annual revenue of $125,000. The equipment will be depreciated under MACRS as a five-yearrecovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Yourcompany's marginal tax rate is 35% over the project period. Perform the following: a) Determine the net after - tax cashflows for each period over the project life. b) Net present worth assuming company MARR = 15%. c) Annualequivalent cash flow company MARR 15%. d) IRR of the project.=

Answered: Project Section 4: You are considering…

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:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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