Concrete test instrument used in construction for evaluating

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Reference no: EM131332491

A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $22,500. The instrument will be used for 6 years and be worth $2,750 at that time. The annual cost of use and maintenance will be $12,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $30,500, with use and maintenance costs of only $9,500 and salvage value after 6 years of $4,500. The marginal tax rate is 40%, and MARR is an after-tax 12%.

Determine which alternative is less costly, based upon comparison of after-tax annual worth.

Show the AW values used to make your decision:

Alternative 1: $__________

Alternative 2: $__________

Reference no: EM131332491

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