Candy, Inc. is considering the installation of a new sugar delivery mechanism that costs $145,000. This mechanism is exp
Posted: Thu May 19, 2022 2:37 pm
Candy, Inc. is considering the installation of a new sugar
delivery mechanism that costs $145,000. This mechanism is expected
to save them $32,000 per year in labor costs for the
next 15 years. Maintenance costs are expected to average $8,000 per
year. Use straight-line depreciation and assume $0 salvage value.
The total income tax rate is 34% (federal,
state, and municipal).
What is the after-tax rate of return for this mechanism?
Give rate of return in percent to 3 decimal places like 8.766% or
25.879%
delivery mechanism that costs $145,000. This mechanism is expected
to save them $32,000 per year in labor costs for the
next 15 years. Maintenance costs are expected to average $8,000 per
year. Use straight-line depreciation and assume $0 salvage value.
The total income tax rate is 34% (federal,
state, and municipal).
What is the after-tax rate of return for this mechanism?
Give rate of return in percent to 3 decimal places like 8.766% or
25.879%