Author Question: The depreciable value of an asset, under MACRS, is the ________. A) current cost B) current cost ... (Read 107 times)

a0266361136 · **on:** Jul 10, 2018

The depreciable value of an asset, under MACRS, is the ________.

A) current cost
B) current cost minus salvage value
C) the original cost plus installation
D) the original cost plus installation costs, minus salvage value

Question 2

Given the information in Table 10.1 and 15 percent cost of capital,
(a) compute the net present value.
(b) should the project be accepted?

What will be an ideal response?

ynlevi · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

C

Answer to Question 2

(a) NPV = (1,000 / 0.15 ) x 1 - 1 / (1.15 )5 - 2,500
= 1,000 (3.352 ) - 2,500 = 852
(b) Since NPV > 0, the project should be accepted.