You are thinking about abandoning your business. If youdo then you will receive

You are thinking about abandoning your business. If youdo then you will receive $168000 on an after-tax basis from theland associated with your business.Abandoning your business would bring $15000 on an after-tax basisfrom sale of equipment; also you would not have to repairequipment at a cost of $10800 per year on an after-tax basis. Thebefore-tax cash flows from your business are $60000 per year. Yourtax rate is 25% and your required return is 12%. If you abandonyour business you will be able to spend your time earning wagesthat are equivalent to receiving an annuity of $16000 per year onan after-tax basis until you retire in 12 years. At that time youcould sell your land but would only realize what you could receivetoday. Should you abandon your business if you can make more moneydoing that?