A company is consider buying a new machine for $9,060. The manufacturer tells you that the machine, with regular maintenance of around $180 per year, should be able to continue working for 14 years. Based on your calculations the salvage value at that time should be about $250. According to the current asset class table the allowable depreciation

Question

A company is consider buying a new machine for

$9,060

. The manufacturer tells you that the machine, with regular maintenance of around

$180

per year, should be able to continue working for 14 years. Based on your calculations the salvage value at that time should be about

$250

. According to the current asset class table the allowable depreciation rate for this machine would be

26%

. If the company's tax rate is

45%

and their after-tax MARR is

9%

, what is the after tax annual worth of this investment? Use four decimal place accuracy for the CTF and CSF.

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