What would be the equivalent after-tax annual worth

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Reference no: EM131506267

Question: An office supply company has purchased a lightduty delivery truck for $18,000. The truck will be depreciated under the MACRS with a property class of 5 years. The truck's MV is expected to decrease by $3,000 per year. It is anticipated that the purchase of the truck will increase the company's revenue by $10,000 annually, whereas the associated operating expenses are expected to be $3,500 annually. The company has an effective income tax rate of 40%, and its after-tax MARR is 15% per year. If the company plans to keep the truck only 2 years, what would be the equivalent after-tax annual worth of this investment?

Reference no: EM131506267

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