Details of this Paper

A proposed cost-saving device has an installed cost of $730,000

Description

solution


Question

Question;A proposed cost-saving device has an installed cost of $730,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $55,000, the marginal tax rate is 35 percent, and the project discount rate is 9 percent. The device has an estimated year 5 salvage value of $80,000. What level of pretax cost savings do we require for this project to be profitable

 

Paper#50683 | Written in 18-Jul-2015

Price : $22
SiteLock