The equivalent after-tax annual worth of this investment

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Reference no: EM13803273

An office supply company has purchased a light-duty delivery truck for $16,000. The truck will be depreciated under the MACRS with a property class of five years. The truck’s MV is expected to decrease by $1,500 per year. It is anticipated that the purchase of the truck will increase the company’s revenue by $13,000 annually, while the associated operating expenses are expected to be $1,800 annually. The company has an effective income tax rate of 40%, and its after-tax MARR is 15% per year. If the company plans to keep the truck only two years, what would be the equivalent after-tax annual worth of this investment?

Reference no: EM13803273

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