What is after-tax life of the previously purchased equipment

Reference no: EM132170596

Question: BC Junction purchased some embroidering equipment for their Denver facility 3 years ago for $15,000. This equipment qualified as MACRS 5-year property. Maintenance costs are estimated to be $1000 this next year and will increase by $1000per year thereafter. The market (salvage) value for the equipment is $10,000 at the end of this year and declines by $1000 per year in the future. If BC Junction has an after-tax MARR of 30%, a marginal tax rate of 45% on ordinary income, depreciation recapture, and losses, what after-tax life of this previously purchased equipment has the lowest EUAC? Use a spreadsheet to develop your solution.

Reference no: EM132170596

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