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Two machines have the following estimates Machine A -15000 3,000 -3,000 10 Machine B...

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Accounting

Two machines have the following estimatesimage

Machine A -15000 3,000 -3,000 10 Machine B -22000 5,000 First cost, $ Salvage value, $ AOC, $/year Life, year -1,500 10 Either machine is to be used for a total 10 years, then sold for the estimated salvage value. The before-tax MARR is 14%, after-tax MARR is 7%, and tax rate is 50%. Select a machine on the basis of (a) before- tax PW (b) after-tax PW using classical SK depreciation over the 10 year-life. Machine A -15000 3,000 -3,000 10 Machine B -22000 5,000 First cost, $ Salvage value, $ AOC, $/year Life, year -1,500 10 Either machine is to be used for a total 10 years, then sold for the estimated salvage value. The before-tax MARR is 14%, after-tax MARR is 7%, and tax rate is 50%. Select a machine on the basis of (a) before- tax PW (b) after-tax PW using classical SK depreciation over the 10 year-life

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