Leisure Vacations Is Considering a Project with a Life of 5

question 25

Multiple Choice

Leisure Vacations is considering a project with a life of 5 years that will require the purchase of $1.4 million in new 5-year MACRS equipment.The MACRS rates are 20 percent,32 percent,19.2 percent,11.52 percent,11.52 percent,and 5.76 percent for Years 1 to 6,respectively.Ignore bonus depreciation.The firm desires a minimum 14 percent rate of return and the tax rate is 22 percent.The equipment can be sold at the end of the project for an estimated $225,000.What is the amount of the aftertax salvage value?

• A)$187,600.00
• B)$162,418.54
• C)$195,322.15
• D)$184,238.97
• E)$193,240.80

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Definitions:

Voltage Spikes

Brief, transient voltages significantly higher than the normal power line voltage, which can potentially damage electronic equipment.

Electromagnetic Interference (EMI)

A phenomenon responsible for noise in electric circuits.

PLC System

A programmable logic controller system, an electronic system used for industrial automation, controlling machinery and processes through digital input and output.