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.

---

Definitions:

Product Variant

A version of a product that differs in certain characteristics from other versions in the same product line.

Product Type

Categories into which goods or services are grouped based on similar characteristics, functions, or intended uses by consumers.

Market Definition

The process of outlining the boundaries of a market including its scope, products, and services, to understand the competitive landscape.

Premises

Statements or observations on which an argument, theory, or study is based.