A corporation bought land for $500,000, built a$1,000,000 farm building, and installed $700,000worth of agricultural equipment. The plant wascompleted and operation begun on April 1. Yearlyrevenue for the project is expected to be $750,000with expenses of $500,000. If the firm usedMACRS for depreciation and pays taxes at thecorporate rate what is the after-tax cash flow forthis project in each year of the equipment's usefullife? Calculate the present worth of the equipmentif the company's MARR is 9 percent (ignore thevalue of the farm building).

Present value is the concept that states an amount of money today is worth more than that same…

MACRS for depreciation and pays taxes at the corporate rate what is the after-tax cash flow for this project in each year of the equipment's useful life? Calculate the present worth of the equipment if the company's MARR is 9 percent (ignore the

MACRS for depreciation and pays taxes at the corporate rate what is the after-tax cash flow for this project in each year of the equipment's useful life? Calculate the present worth of the equipment if the company's MARR is 9 percent (ignore the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A corporation bought land for $500,000, built a
$1,000,000 farm building, and installed $700,000
worth of agricultural equipment. The plant was
completed and operation begun on April 1. Yearly
revenue for the project is expected to be $750,000
with expenses of $500,000. If the firm used
MACRS for depreciation and pays taxes at the
corporate rate what is the after-tax cash flow for
this project in each year of the equipment's useful
life? Calculate the present worth of the equipment
if the company's MARR is 9 percent (ignore the
value of the farm building).

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