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Calculate the AW value for the Fixture X and Fixture Y. Two fixtures are...

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Finance

imageCalculate the AW value for the Fixture X and Fixture Y.

Two fixtures are being considered or a particular obin a manufacturing firm. The pertinent data for her comparison are summarized in the following table. The effective federal and state income tax rate is 45%. Depreciation recapture is also taxed at 45%. If the after-tax MARR is 12% per year, which of the two fixtures should be recommended? Assume repeatability Capital investment Annual operating expenses Useful life Market value Depreciation method SL to zero book value over 5 years Fixture X 20,000 $2,000 6 years $4,000 Fixture Y 35,000 54.500 8 years 57,000 MACRS (GDS) with 5-year recovery period Click the icon to view the GDS Recovery Rates (rk) for the 5-year property class Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year

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