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Business, 23.04.2021 15:40 lexipooh5954

A new municipal refuse collection vehicle can be purchased for $84,000. Its expected useful life is six years, at which time the market value and book value will be zero. Before-tax cash flow (BTCF) will be +$18,000 per year over the six-year life of the vehicle. Solve,
a. Use straight-line depreciation, an effective income tax rate of 40% and an after-tax MARR of 12% to determine the present worth of the investment.
b. What is the after-tax internal rate of return? c. Is this vehicle a sound investment? Explain your answer.

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