Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. using an marr of 18%, calculate the before and aft

Using an MARR of 18%, calculate the before and after-tax rate of return on the...

70.2K

Verified Solution

Question

Accounting

Using an MARR of 18%, calculate the before and after-tax rate of return on the replacement proposal.
image
13-47 The Quick Manufacturing Company, a large profitable corporation, may replace a production machine tool. A new machine would cost $37,000, have an 8-year useful life, and have no salvage value. For tax purposes, 3-year MACRS depreci- ation would be used. The existing machine tool cost $40,000 4 years ago, and it has been completely depreciated. The tool could be sold now to a used equipment dealer for $10,000 or be kept in ser- vice for another 8 years. It would then have no salvage value. The new machine tool would save about $9000 per year in operating costs compared to the existing machine. Assume a 20% combined state and federal tax rate. Compute the before-tax rate of return on the replacement proposal of installing the new machine rather than keeping the existing machine

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Marketing Question: Identify two most important core competencies that the compancy CD Tradepost has and how...

Operations Management
Q

Cancer can seem unavoidable, but we luckily know that certain behaviors and health choices are correlated...

Biology
Q

How would the body normally compensate for this change in MAP such as a decrease? targets,...

Medical Sciences
Q

Which of the following is an example of a chemical change O Melting of ice...

Biology
Q

x 5 x 10 O x 50 x 5 x 50 x 5 O x...

Algebra
Q

Remarkable Accountants Co. sells $ 5 comma 000 comma 000 of...

Accounting
Q

RWP121 (Algo) Great Adventures Continuing CaseSkip to question [The following information applies to the...

Accounting
Q

Pharoah Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizable-value(LCNRV) basis in...

Accounting
Q

Mountain Mining paid $362,500 for the right to extract mineral assets from a 350,000-ton deposit....

Accounting
Q

Sullivan's wife Susan died four years ago. Sullivan has not remarried and he maintains a...

Accounting
Q

Questlon 8. The ogerations vice-president of the Regal Bank of Canada, Kristin Wur, bus been...

Accounting
Q

A summary of Vytrill Inc.'s budgeted profit statement for next financial year, when it expects...

Finance