What is the approximate value of before-tax marr

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Reference no: EM13199586

A widget production machine can be purchased and installed for $100,000. It is in the seven-year GDS property class, and is expected to be kept in service for eight years. It is believed that $7,500 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e., revenues less expenses) is projected to vary from year to year, as depicted in the table:
Year 1 2 3 4 5 6 7 8
Amount $15,000 $13,000 $16,000 $15,000 $15,000 $16,000 $14,000 $15,000
An effective income tax rate of 40% is used by the company, and the after-tax MARR equals 15% per year.

a. What is the approximate value of the company's before-tax MARR?

Reference no: EM13199586

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