Problem
Florida Construction Equipment Rentals (FCER) purchases a new 10,000-pound-rated crane for rental to its customers. This crane costs $1,125,000 and is expected to last for 25 years, at which time it will have an expected salvage value of $147,000. FCER earns $195,000 before-tax cash flow each year in rental income from this crane, and its total taxable income each year is between $10M and $15M. If FCER uses straight-line depreciation and a MARR of 15%, what is the present worth of the after-tax cash flow for this equipment? Should the company invest in this crane? Contributed by Paul R. McCright, University of South Florida.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.