Two investments involving a virtual mold apparatus for


Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $59,500.00, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $89,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 40 percent, and MARR is an after-tax 10 percent.

Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative.

AW of A =?

AW of B =?

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Business Economics: Two investments involving a virtual mold apparatus for
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