AAA Pest Control uses the following: before-taxMARR = 14%

Chapter 17, Problem 17.53

(choose chapter or problem)

AAA Pest Control uses the following: before-taxMARR = 14% per year, after-tax MARR = 7% peryear, and Te = 50%. Two new spray machineoptions have the following estimates and willgenerate the same GI each year.Machine A BFirst cost, $ 15,000 22,000Salvage value, $ 3,000 5,000AOC, $ per year 3,000 1,500Life, years 10 10 Select A or B under the following conditions usingthe method described or as instructed:(a) Before-tax PW analysis using spreadsheetfunctions.(b) After-tax PW analysis using classical SLdepreciation over the 10-year life using handsolution.(c) After-tax PW analysis using MACRSdepreciation with a 5-year recovery periodusing a spreadsheet. Assume the machineswill be retained for 10 years, then sold at theestimated salvage values.

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