Problem 17.051: Calculate the after-tax PW of two alternatives Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet The after-tax minimum acceptable rate of return (MARR) is 8% per year, Modified Accelerated Cost Recovery System (MACRS) depreciation applies, and Te= 40%. The (GI - OE) estimate is made for the first 3 years; it is zero in year 4 when each asset is sold. Alternative First Cost, $ Salvage Value, Year 4, S GI-OE, S per Year Recovery Period, Years 8,000 -13,000 2,000 5,000 3,500 3 (3 The PW for alternative X is determined to be $ The PW for alternative Y is determined to be S Alternative (Click to select) is selected

Problem 17.051: Calculate the after-tax PW of two alternatives Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet The after-tax minimum acceptable rate of return (MARR) is 8% per year, Modified Accelerated Cost Recovery System (MACRS) depreciation applies, and Te= 40%. The (GI - OE) estimate is made for the first 3 years; it is zero in year 4 when each asset is sold. Alternative First Cost, $ Salvage Value, Year 4, S GI-OE, S per Year Recovery Period, Years 8,000 -13,000 2,000 5,000 3,500 3 (3 The PW for alternative X is determined to be $ The PW for alternative Y is determined to be S Alternative (Click to select) is selected

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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