Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 49

The Hillside Machine Shop expects to have an annual taxable income of $425,000 from its regular business over the next six years. The company is considering acquiring a new milling machine during year 0. The machine's price is $200,000 installed. The machine falls into the MACRS seven-year class, and it will have an estimated salvage value of $50.000 at the end of six years. I he machine is expected to generate additional before-tax revenue of $80,000 per year.
(a) What is the total amount of economic depreciation for the milling machine if the asset is sold at $50,000 at the end of six years
(b) Determine the company's marginal tax rates over the next six years with the machine.
(c) Determine the company's average tax rates over the next six years with the machine.