Current machines have a 5 year life and were purchased 3, Ask an Expert

Economics

Current machines have a 5 year life and were purchased 3 years ago at $1500000 - Invest $1 Million in upgrade costs to extend the life of the machines for another 5 years - Savings in labor resulting from upgrade, $300000 per year in 1st year dollars. Assume 5% inflation rate. - Market Value $209789 in today's dollars 5 years after the upgrade. Assume 5% inflation. - For depreciation for this option complete the depreciation of the original cost basis and start a new depreciation for the $1 million investment. Use Asset Class 37.2 Manufacturer of Aerospace Products-MACRS GDS 7 year recovery the old machines and for the upgrade investment. Find the present worth of the investment.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9473892

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