Does inflation increase or decrease the eac

Reference no: EM132168983

Question: The purchase of a large-volume copier is being considered. Use MACRS and the current tax law. The corporation's taxable income exceeds $20M. The first cost is $18,000. Maintenance cost per year is $1300 in year-1 dollars. The salvage value after 10 years is $2000 in year-10 dollars. Assume the real MARR is 8% and the inflation rate is 5%. Find the EAC after taxes. Does inflation increase or decrease the EAC? By how much?

Reference no: EM132168983

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