Business, 06.05.2021 01:50 Picklehead1166

A biotech company has an effective income tax rate of 25%. Recaptured depreciation is also taxed at the rate of 40%. The company must choose one of the following mutually exclusive cryogenic freezers for its tissue samples. The after-tax MARR is 12% per year. Which freezer should be selected based on after-tax present worth? Freezer 1 Freezer 2
Capital Investment $10,000 $30,000
Annual Benefit $3,000 $9,000
Depreciation Method SL MACRS
Depreciable Life 3 years 3 years
IRS Approved SV for Depreciation $2,000 $0
Useful Life 5 years 5 years
Actual MV at End of Useful Life $2,000 $2,000

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A biotech company has an effective income tax rate of 25%. Recaptured depreciation is also taxed at...