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...

80.2K

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

Biology
1.2K views

Compare and contrast the polymerization of actin and tubulin in vitro and in vivo.

Psychology
1.2K views

Select one topic below.  Define it and discuss its relationship with stress and wellness according to research. - Cognitive...

Physics
1.2K views

2 20 A racing car moving towards a cliff sounds its horn The sound reflected...

Calculus
1.2K views

In Exercises 15 24 use the fundamental identities and appropriate algebraic Operations to simplify each...

Calculus
1.2K views

Simplify the following expression 8 9a1810 81 819a1483 31 Show your work here Hint To...

Calculus
1.2K views

Make a sketch to show a case in which the area bounded by two curves...

Accounting
1.2K views

Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit....

Accounting
1.2K views

Required information Skip to question [The following information applies to the questions displayed...

Accounting
1.2K views

19. Explain component unit

Accounting
1.2K views

Under job order costing system, which off the following costs would be recorded as debit...

Accounting
1.2K views

1. Which of the following is true while making a capital investment decision? A. A...

Finance
1.2K views

Selected data for a company for 20x0 are as follows: Beginning stockholders equity $5,000 Income...