A logistics company is deciding between two models of semi- trailer trucks to add to its fleet. The manager has prepared the following information for the economic evaluation. The new trucks are to be used for 7 years and sold for the estimated salvage value. The before- tax MARR is 16.39% per year and the effective tax rate is 39%. Select a machine on the basis of after- tax annual worth analysis using MACRS with a 5- year recovery period. $$\begin{array} { | l | l | l | }
\hline \text { Alternative } & \text { P1 } & \text { P2 } \
\hline \text { First costs } & \$ 245,000 & \$ 230,000 \
\hline \text { Net annual benefits } & \$ 155,000 & \$ 140,000 \
\hline \text { Salvage value } & \$ 44,500 & \$ 37,500 \
\hline \text { Life, years } & 10 & 10 \
\hline
\end{array}$$

Question

A logistics company is deciding between two models of semi- trailer trucks to add to its fleet. The manager has prepared the following information for the economic evaluation. The new trucks are to be used for 7 years and sold for the estimated salvage value. The before- tax MARR is 16.39% per year and the effective tax rate is 39%. Select a machine on the basis of after- tax annual worth analysis using MACRS with a 5- year recovery period. $$\begin{array} { | l | l | l | } 
\hline \text { Alternative } & \text { P1 } & \text { P2 } \
\hline \text { First costs } & \$ 245,000 & \$ 230,000 \
\hline \text { Net annual benefits } & \$ 155,000 & \$ 140,000 \
\hline \text { Salvage value } & \$ 44,500 & \$ 37,500 \
\hline \text { Life, years } & 10 & 10 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of A logistics company is deciding between two models of semi- trailer trucks to add to its fleet. The manager has prepared the following information for the economic evaluation. The new trucks are to be used for 7 years and sold for the estimated salvage value. The before- tax MARR is 16.39% per year and the effective tax rate is 39%. Select a machine on the basis of after- tax annual worth analysis using MACRS with a 5- year recovery period. $$\begin{array} { | l | l | l | } 
\hline \text { Alternative } & \text { P1 } & \text { P2 } \
\hline \text { First costs } & \$ 245,000 & \$ 230,000 \
\hline \text { Net annual benefits } & \$ 155,000 & \$ 140,000 \
\hline \text { Salvage value } & \$ 44,500 & \$ 37,500 \
\hline \text { Life, years } & 10 & 10 \
\hline
\end{array}$$

A Logistics Company Is Deciding Between Two Models of Semi-