Pierce Company Is Considering the Purchase of New Equipment That

question 149

Essay

Pierce Company is considering the purchase of new equipment that will cost $150,000.The equipment will save the company $48,000 per year in cash operating costs.The equipment has an estimated useful life of five years and no expected salvage value.The company's cost of capital is 12%.
Required:
1)Assuming the company is subject to a 40% tax rate,compute the net present value.
2)Compute the amount of the annual depreciation tax shield provided by the new equipment.
3)Should the equipment be purchased? Why or why not?

Recognize the motivations and characteristics of different European immigrants to the American colonies.

Appreciate the sociocultural attitudes of notable figures such as Benjamin Franklin towards diversity and immigration.

Identify the impact of immigration on religious and social diversity in colonial America.

Acknowledge the role of agriculture in the socio-economic development of the eighteenth-century colonies.

---

Definitions:

Gender and Sexuality

Interrelated concepts where gender refers to roles, behaviors, activities, expectations, and societal norms associated with being male or female, and sexuality concerns a person’s sexual orientation, preferences, and identity.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.

Theory

A systematic set of ideas and principles designed to explain certain phenomena or patterns, often forming the basis for further exploration and testing.

Prosumer Capitalism

An economic system where consumers are also involved in the production process, often enabled by digital technology and altering traditional consumer-producer roles.