### Operate the equipment for the minimum

##### Reference no: EM13774338

A company has purchased equipment ( for \$52000) that will reduce materials and labor costs by \$12000 each year for N years. After N years, there will be no further need for the machine, and because the machine is specially designed, it will have no MV at any time. I IRS, however has ruled that the company must depreciate the equipment on a SL basis with a tax life of 5 years. If the effective income tax rate is 36% what is the minimum number of years the company must operate the equipment to earn 10% per year after taxes on it's investment >

a) Your firm must operate the equipment for the minimum ___ years to earn 10% per year after taxes on its investment.

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