Surface mount placement machine produces pre-tax revenue

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Reference no: EM132039189

a. A $400,000 investment in a surface mount placement machine produces pre-tax revenue of $77640/yr for 10 years, at which time the SMP machine has a salvage value of $100,000. Based on a 25% income tax rate, a 12% after tax MARR, & SLN depreciation, what will be the ATPW (After Tax Present Worth) of the investment?

b. Brian a Temple graduate suggests using a 6% bond issue to pay for the investment from the previous example. What will the ATPW be? $ (remember that a bond pays interest only each year and is repaid in full at the end of the term.

Reference no: EM132039189

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