What is the total after-tax annual cost of the equipment

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Reference no: EM131356315

Devon Devices is considering the purchase of production equipment with a first cost of £450 000. After its five-year life, due to increasing demand for this kind of equipment, it will be sold for its original purchase price. The equipment will provide a net value of £450 000 per year during the five-year period. Given that depreciation is declining balance, the after-tax ALARR is 20%, and the corporate income tax rate is 40%, what is the total after-tax annual cost of the equipment?

Reference no: EM131356315

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