Chevron Phillips has put into place new laboratory equipment for the production of chemicals; the first cost is $1,800,000 installed. Chevron Phillips borrows 45 percent of all capital needed, and the borrowing rate is 12.5 percent over 4 years. The throughput rate for in-process test samples has increased

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D Question 5
Chevron Phillips has put into place new
laboratory equipment for the production of
chemicals; the first cost is
$1,800,000 installed. Chevron Phillips.
borrows 45 percent of all capital needed, and
the borrowing rate is
12.5 percent over 4 years. The throughput
rate for in-process test samples has increased
the capacity of the lab, with
a net savings of $X per year. Depreciation
follows MACRS-GDS, ATMARR is 11 percent,
and the planning horizon
is 6 years with a salvage value of $250,000 at
that time. Based on a 40% marginal tax rate,
use Goal Seek or Solver
in Excel to determine the value of X such that
ATMARR is exactly achieved, no more and no
less, if
Transcribed Image Text:D Question 5 Chevron Phillips has put into place new laboratory equipment for the production of chemicals; the first cost is $1,800,000 installed. Chevron Phillips. borrows 45 percent of all capital needed, and the borrowing rate is 12.5 percent over 4 years. The throughput rate for in-process test samples has increased the capacity of the lab, with a net savings of $X per year. Depreciation follows MACRS-GDS, ATMARR is 11 percent, and the planning horizon is 6 years with a salvage value of $250,000 at that time. Based on a 40% marginal tax rate, use Goal Seek or Solver in Excel to determine the value of X such that ATMARR is exactly achieved, no more and no less, if
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