What is the tax on the depreciation recapture

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A new piece of machinery, when placed in service is estimated to cost $225,000. It is expected to produce revenue of $75,000 and operating and maintenance expenses are expected to be $9,000 per year. The useful life of the equipment is 5 years and it expected to have a $35,000 market value at the end of the 5th year. Assume that the firm tax rate is 38%. The machinery is in the MCRS five-year property class.

What is the IRR _______ for the BTCF?

What is the NPW ______ of the ATCF if MARR = 10%?

What is the tax _________ on the Depreciation Recapture?

Reference no: EM13834128

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