Determine the eaw using straight-line depreciation

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Reference no: EM132168057

Question: The Sandwich Co., whose earnings put it in the 46% combined state and federal tax bracket, is considering purchasing a piece of food-handling equipment for $25,000. The equipment has a useful life of 4 years and a salvage value of $5000. The resale value of the equipment will be $6550. The new equipment is expected to increase the company's earnings by $8000 in each of the 4 years. The MARR for Sandwich is 10%. Determine the EAW using

(a) Straight-line depreciation.

(b) MACRS depreciation.

Reference no: EM132168057

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