Determine the present worth (for an MARR of 10%), after taxes, for the physical asset investment below:
Inital Cost=$40,000, Estimated Salvage Value (@ year 5)=18,000, Actual Salvage Value (@ yr.5)=20,000, Depreciation: Straight-Line (No half -year convention), Life=5yrs, Annual Benefit=10,000, and tax rate=34%.
Financing: 50% down paid in cash, and remaining 50% borrowed at 12% interest with the loan repaid in three equal annual payments of $8,326 each. (The interest part of these three payments is 2400 for year 1; 1689 for year 2; and 892 for year 3)