Question 9.11: After-Tax Investment Cost of a Defender: BV < MV An engin...

Engineering Economy

After-Tax Investment Cost of a Defender: BV < MV

An engineering consulting firm is considering the replacement of its CAD workstation. The workstation was purchased four years ago for $20,000.Depreciation deductions have followed the MACRS (GDS) five-year property class schedule. The workstation can be sold now for $4,000. Assuming the effective income tax rate is 40%, compute the after-tax investment value of the CAD workstation if it is kept.

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