An aute generate $85,000 of savings for each of the next 6 years. At the end of the 6 years, the machine will have negligible salvage value. Assume that the machine depreciated using MACRS 3-year property class, and that the factory's after-taxMARR is 9%. The tax rat 29%. Compute the PW and IRR, and determine whether or not the factory should invest in this machine. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. PW-$ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 10. IRR- Round entry to 1 decimal place. The tolerance is 20.2. the oew fuxture?

An aute generate $85,000 of savings for each of the next 6 years. At the end of the 6 years, the machine will have negligible salvage value. Assume that the machine depreciated using MACRS 3-year property class, and that the factory's after-taxMARR is 9%. The tax rat 29%. Compute the PW and IRR, and determine whether or not the factory should invest in this machine. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. PW-$ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 10. IRR- Round entry to 1 decimal place. The tolerance is 20.2. the oew fuxture?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 1 A new machine is to be purchased for $200,000. The company believes it will generate $75,000 annually in revenue due to the purchase of this machine. The company will have to train an operator to run this machine and this will result in additional labor expenses of $25,000 annually. The new machine will be depreciated using 5 years MACRS, even though the life of the project is 7 years, and the salvage value is estimated to be $0 at the end of year 7. The tax rate is 40% and the company's MARR is 15%.
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The following table contains a summary of how a project's balance is expected to change over its 5 year service life at 10% interest. End of Period Project Balance -$1,000 -1,500 600 1 3 900 4 1,500 2,000 5 Which of the following statements is incorrect? Select one: a. The net future of the project at 10% interest is $2,000 b. The required additional investment at the end of period 1 is $500 c. The net present worth of the project at 10% interest is $1,242 d. Within 2 years, the company will recover all its investments and the cost of funds (interest) from the project
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Question 1 If you buy an aircraft for 10 million and pay a sales tax of 35%. Prepare depreciation schedule using MACRS, Assuming 10% interest rate, what's the net present worth of the depreciation schedule, using MACRS? Assume 5-yeap property class. Your Answer: Answer
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