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  • Lane Construction LTD Is Considering The Acquisition of A New

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    Lane Construction Ltd is considering purchasing a new eighteen-wheeler truck for $80,000 plus $20,000 in modifications. The truck is expected to save the company $45,000 per year in leasing costs over its 3-year useful life before being sold for $30,000. With a 40% tax rate and 15% MARR, the project is acceptable based on the estimated savings and costs provided.

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    Lane Construction Ltd is Considering the Acquisition of a New

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    Lane Construction Ltd is considering purchasing a new eighteen-wheeler truck for $80,000 plus $20,000 in modifications. The truck is expected to save the company $45,000 per year in leasing costs over its 3-year useful life before being sold for $30,000. With a 40% tax rate and 15% MARR, the project is acceptable based on the estimated savings and costs provided.

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    11 views1 page

    Lane Construction LTD Is Considering The Acquisition of A New

    Uploaded by

    Freelance Worker
    Lane Construction Ltd is considering purchasing a new eighteen-wheeler truck for $80,000 plus $20,000 in modifications. The truck is expected to save the company $45,000 per year in leasing costs over its 3-year useful life before being sold for $30,000. With a 40% tax rate and 15% MARR, the project is acceptable based on the estimated savings and costs provided.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Lane Construction Ltd is considering the acquisition of a

    new #4899
    Lane Construction Ltd. is considering the acquisition of a new eighteen-wheeler.• The truck's
    base price is $80,000, and it will cost another $20,000 to modify it for special use by the
    company.• This truck falls into the MACRS five-year class. It will be sold after three years for
    $30,000.• The truck purchase will have no effect on revenues, but it is expected to save the firm
    $45,000 per year in before-tax operating costs, mainly in leasing expenses.• The firm's marginal
    tax rate (federal plus state) is 40%, and its MARR is 15%.(a) Is this project acceptable, based
    on the most likely estimates given in the problem?(b) If the firm's MARR is increased to 25%,
    what would be the required savings in leasing so that the project would remain profitable?View
    Solution:
    Lane Construction Ltd is considering the acquisition of a new

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    http://paperinstant.com/downloads/lane-construction-ltd-is-considering-the-acquisition-of-a-new/

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