You are evaluating a potential investment in equipment what


You are evaluating a potential investment in equipment. The equipment's basic price is $133,000, and shipping costs will be $4,000. It will cost another $20,000 to modify it for special use by your firm, and an additional $8,000 to install it. The equipment falls in the MACRS 3-year class that allows depreciation of 33% the first year, 45% the second year, 15% the third year, and 7% the fourth year. You expect to sell the equipment for 24,800 at the end of three years. The equipment is expected to generate revenues of $127,000 per year with annual operating costs of $58,000. The firm's marginal tax rate is 20.0%. What is the value of the after-tax cash flow associated with the sale of the equipment?

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Financial Management: You are evaluating a potential investment in equipment what
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