Tax equivalent uniform annual cost of owning and operating

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Reference no: EM13733563

Your company has just signed a three- year non renewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment cost $200,000 and qualifies for 5 years depreciation. At the end of the 3 years contract you expected to be able to sell the equipment for $70,000. If the projected operating expenses for the equipment is $65,000 per year, what is the after tax equivalent uniform annual cost of owning and operating this equipment. The effective income tax rate is 40% and the after tax MARR is 12 per year.

Reference no: EM13733563

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