An asset in the 5-yr. MACRS property class cost $100,000 and has no salvage value after six years of use. The asset will generate $300,000 in annual revenues and will require $100,000 in annual labor costs and $50,000 in annual materials costs. Assume tax rate of 40% and MARR = 12%.
a. What is the Present Worth of the project?
b. Should the project be accepted?