| Question | Granny’s Butter and Egg Business is such that she pays an effective tax rate of 40%. Granny is considering the purchase of a new Throb Churn for $25,000. This churn is a special handling device for food manufacture and has an estimated life of 4 years and a of $5000. The new churn is expected to increase net income by $8000 per year for each of the 4 years of use. If Granny works with an after-tax of 10% and uses MACRS , should she buy the churn? |
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| Subject | business-economics |
