A Plantation Has Purchased an Automated Propagation System for $26,000

question 1

Short Answer

A plantation has purchased an automated propagation system for $26,000. The declining balance depreciation at a rate of 2 times the straight line rate and a $2022 salvage value are used to write off the capital investment. The company expects to realize net revenue of
$8000 each year for the next 5 years. Assume an effective federal tax of 39%, state income tax of 12.25% per year, and an after- tax MARR of 4% per year. Calculate the present worth of this investment.

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Definitions:

Small for Date

A term used to describe newborns that are smaller than the average for their gestational age, often due to factors affecting growth in the womb.

Preterm

A birth that occurs 35 or fewer weeks after conception.

Gestation

The process or period of developing inside the womb between conception and birth.

Gestational Age

The age of an embryo or fetus from the first day of the mother's last menstrual period, used to determine expected delivery date.