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Business, 14.04.2020 19:28 1xXJOKERXx3

Use the after-tax IRR method to evaluate the following three alternatives using 60% bonus depreciation in Year 0 and 3-year MACRS, and offer a recommendation. The after-tax MARR is 25%, the project life is 5 years, and the firm has a combined incremental tax rate of 31%.

Alternative First Cost Annual Costs Salvage Value
A $14000 $2500 $5000
B 18000 1000 10000
C 10000 5000 0

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