A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS...
90.2K
Verified Solution
Link Copied!
Question
Accounting
A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $23,000. The instrument will be used for 6 years and be worth $2,750 at that time. The annual cost of use and maintenance will be $5,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $32,000, with use and maintenance costs of only $9,000 and salvage value after 6 years of $2,000. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: \$ Alternative 2: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is \pm 10 . A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $23,000. The instrument will be used for 6 years and be worth $2,750 at that time. The annual cost of use and maintenance will be $5,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $32,000, with use and maintenance costs of only $9,000 and salvage value after 6 years of $2,000. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: \$ Alternative 2: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is \pm 10
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!