Grannys Butter and Egg Business is such that she pays an effective tax rate of...
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Accounting
Grannys Butter and Egg Business is such that she pays an effective tax rate of 25%. Granny is considering the purchase of a new Turbo Churn for $25,000. This churn is a special handling device for food manufacture and has an estimated life of 4 years and a salvage value of $5,000. The new churn is expected to increase net income by $8,000 per year for each of the 4 years of use. If Granny works with an after-tax MARR of 10% and uses 60% bonus depreciation and 3-year MACRS depreciation, should she buy the churn?
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