When to use macrs with the depreciation life of three years

Reference no: EM13201713

1-A business requires an initial investment of $800000 and annual operating cost of $100000. It generates an annual income of $500000 and a salvage value of $500000 after 4 years . At MARR = 10% and an effective tax rate of 30%, evaluate this investment . Use MACRS with the depreciation life of 3 years.

2-Repeat the previous problem when 50% of the initial investment ($400000) is borrowed at 10% to be paid back in 3 equal installment. just prepare ATCF. no evaluation is necessary. Do not calculate IRR, P.W. etc .

Reference no: EM13201713

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