Agranary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor can be purchased and installed for $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth Alternative 1 Show the AW values used to make your decision: Alternative 2 Conveyor 1:$ Conveyor 2:$ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 10

Agranary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor can be purchased and installed for $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth Alternative 1 Show the AW values used to make your decision: Alternative 2 Conveyor 1:$ Conveyor 2:$ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 10

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Description: Agranary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor canbe purchased and installed for $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $95,000 with $4,500 salvage value after 16 years. The other can be purchased and installed for $95,000 with $5,500 salvage value after 16 years. Operation and maintenance for each is expected to be $21,000 and $16,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. What must be the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two?
A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $95,000 with $4,500 salvage value after 16 years. The other can be purchased and installed for $95,000 with $5,500 salvage value after 16 years. Operation and maintenance for each is expected to be $21,000 and $16,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 40%, and has a MARR of 9% after taxes. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision:Conveyor 1:Conveyor 2:
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