Three alternatives for macrs three year property

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Reference no: EM132018944

Use the after-tax IRR (internal rate of return) method to evaluate the following three alternatives for a MACRS 3-year property, and oer a recommendation on which one should be preferred. The project life is 3 years. The rm has a combined income tax rate of 35%.

Alternatives Initial cost Annual cost savings Salvage value

A 15,000 2500 5000

B 18,000 1000 9,000

C 10,000 5000 0

Hint: you need to use the MACRS depreciation percentage rate table

Reference no: EM132018944

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