A furniture manufacturer is planning on buying a new industrial sander costing $118,000. The sander has projected mainte
Posted: Sun May 29, 2022 5:59 pm
A furniture manufacturer is planning on buying a new industrial
sander costing $118,000. The sander has projected maintenance costs
of $16,000 annually over the three-year life of the sander. At the
end of the three years, the sander will be worthless and will be
scrapped. The company has a 34% tax rate, a 16% discount rate, and
uses straight-line depreciation over the life of a project. What is
the equivalent annual cost?
a. $36,520
b. $51,311
c. $55,333
d. $68,540
e. None of the above.
Correct answer _____________________________
sander costing $118,000. The sander has projected maintenance costs
of $16,000 annually over the three-year life of the sander. At the
end of the three years, the sander will be worthless and will be
scrapped. The company has a 34% tax rate, a 16% discount rate, and
uses straight-line depreciation over the life of a project. What is
the equivalent annual cost?
a. $36,520
b. $51,311
c. $55,333
d. $68,540
e. None of the above.
Correct answer _____________________________