You must evaluate the purchase of a proposed technology for the R&D department. The base...
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You must evaluate the purchase of a proposed technology for the R&D department. The base price is $165,000 and it would cost another $27,000 to modify the equipment for special use by the firm. The equipment will be sold after 3 years for a salvage value of $50,000. The equipment will be depreciated using straight-line depreciation. The equipment requires an $8,000 increase in net operating working capital. The firms marginal tax rate is 35%. What is the annual depreciation expense?
| a | 38,333 | |
| b | 47,333 | |
| c | 47,667 | |
| d | 64,000 | |
| e | 45,000 | |
| f | none of the available choices |
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