Question

Your company has just signed a three- year nonrenewable contract with the city of new orleans for earthmoving work. you are investigating the purchase of heavy construction equipment for this job. the equipment cost $200,000 and qualifies for 5 years depreciation. at the end of the 3 years contract you expected to be able to sell the equipment for $70,000. if the projected operating expenses for the equipment is $65,000 per year, what is the after tax equivalent uniform annual cost of owning and operating this equipment. the effective income tax rate is 40% and the after tax marr is 12 per year?

Answer 1

The answer and procedures of the exercise are attached in the following archives.

Explanation

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