A Private Metropolitan Mass Transit System Operator Wants to Add

question 21

Essay

A private metropolitan mass transit system operator wants to add a new trolleybus to its fleet. The following information is prepared for the economic evaluation. Either trolley is to be used for 8 years and sold for the estimated salvage value. The before- tax MARR is 12.31% per year and the effective tax rate is 35%. Using SL depreciation, select a machine on the basis of after- tax annual worth analysis. $$\begin{array} { | l | l | l | } \hline \text { Alternative } & \text { T } 1 & \text { T2 } \\\hline \text { First costs } & \$ 490,000 & \$ 475,000 \\\hline \text { Annual benefits } & \$ 110,000 & \$ 93,000 \\\hline \text { Salvage value } & \$ 39,000 & \$ 34,000 \\\hline \text { Useful life, years } & 10 & 8 \\\hline\end{array}$$

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Definitions:

Preindustrial Societies

Societies characterized by limited technological development, with economies based chiefly on subsistence farming or hunting and gathering.

Smaller Versions

Refers to reduced or miniaturized forms or editions of objects, concepts, or models, maintaining essential features or functions on a reduced scale.

Flexible Self

the ability of an individual to adapt their behaviors, attitudes, and perceptions in response to different situations, challenges, or environments.

Socialization

The process by which individuals learn and internalize the values, beliefs, and norms of their culture, contributing to their personal development and social identity.