Milliken uses a digitally controlled dyer for placing intricate and integrated patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. It is expected to last years and have a salvage value of $30.000. Increased net income due to this dyer is $95.000 per year. Milliken's tax rate is 40 percent, and the after-tax MARR is 12 percent. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, and IRR after 8 years. Use S-years class depreciation for MACRS

Milliken uses a digitally controlled dyer for placing intricate and integrated patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. It is expected to last years and have a salvage value of $30.000. Increased net income due to this dyer is $95.000 per year. Milliken's tax rate is 40 percent, and the after-tax MARR is 12 percent. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, and IRR after 8 years. Use S-years class depreciation for MACRS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Milliken uses a digitally controlled dyer for placing intricate and integrated patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. It is expected to last years and have a salvage value of $30.000. Increased net income due to this dyer is $95.000 per year. Milliken's tax rate is 40 percent, and the after- tax MARR is 12 percent. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, and IRR after 8 years. Use S-years class depreciation for MACRS
We are evaluating a project that costs $2,190,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 91,200 units per year. Price per unit is $38.97, variable cost per unit is $24.05, and fixed costs are $866,000 per year. The tax rate is 22 percent and we require a return of 11 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within \pm 10 percent. Calculate the best-case and worst -case NPV figures.
Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,000. It will produce $45,000 in net revenue each year during its life. Corporate income taxes are 40 percent, and the after-tax MARR is 10 percent. Determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR, if the router is kept for 12 years. After-tax PW: $enter a dollar amount rounded to the nearest dollar After-tax AW: $enter a dollar amount rounded to the nearest dollar After-tax IRR: enter percentages rounded to 1 decimal place % After-tax ERR: enter percentages rounded to 1 decimal place
The Industrial Engineering at Shocker Communications has devised one alternative method involving new tooling for a job being machined in the shop. Data on the present and proposed method are shown in the table below. What production quantity would be required for the alternative method to be more economical? Assume the base pay rate is $10.0 per hour. The estimated production quantity is 15040 per year. The fixtures are capitalized and depreciated in 4 years. Round your answer to the closest integer. Method Standard Time (min) Fixture Cost Tool Cost Average Tool Life Present 10,000 0.856 0 $6 Method pieces 32845 Alternative 0.791 $930 $20 pieces
1.) TEI incorporated is considering the use of concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each and will last for 15 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. Assume annual taxes amount to 2% of the first cost and zero salvage value in both cases. .Evaluate the two options and recommend which one is to be chosen using the methods indicated . Money is worth 12% Using the Annual Cost Method. Annual Cost of Wooden Poles = __________________ , Annual Cost of Concrete Poles = _________________ Recommendation: _____________________________________
Please show me the solution and select the final answer thank you!
XYZ Products Company is considering a new product that will sell for P100 and has a variable cost of P60. Expected volume is 20,000 units. New equipment costing P1,500,000 and having a five-year useful life and no salvage value is needed, and will be depreciated using the straight-line method. The machine has fixed cash operating costs of P200,000 per year. The firm is in the 40 percent tax bracket and has cost of capital of 12 percent. The present value of 1, end of five periods is 0.56743; present value of annuity of 1 for 5 periods is 3.60478. How many units per year the firm must sell for the investment to earn 12 percent internal rate of return?
Teresa and Marvin are married and file a joint return. The standard deduction for their filing status is $10,000. They have the following itemized deductions: Medical bills above the limit $400 Interest expense $3,500 State income taxes $1,500 Miscellaneous deductions $250 Should Teresa and Marvin itemize their deductions or use the standard deduction?
A Civil Engineer is considering establishing his own company. An investment of $4,000,000 will berequired, which will be recovered in 15 years.It is estimated that revenue will be $8,000,000 per year and that operating expenses will be as follows:Materials $1,600,000 per yearLabor $2,800,000 per yearOverhead $400,000 + 10% of the yearly revenueOther expenses $600,000 per yearThe engineer will give up his regular job paying $2,160,000 per year and devote his time fulltime to theoperation of the business; this will result in decreasing labor costs by $400,000 per year, material costs by$280,000 per year and overhead cost by $320,000 per year. If the man expects to earn at least 20% ofhis capital, should he invest? NOTE: Use Future Worth Method.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciation amount in the third year and the BV at the end of the fifth year of life by each of these methods: (7.3, 7.4) a. The SL method. b. The 200% DB method with switchover to SL. c. The GDS. d. The ADS.
1. The O & M cost of an equipment is given in the table below. Determine the EUAC of this equipment in year 6. Assume a MARR of 8%. Year 1 2 3 5 6 O&M Cost $8,000 $7,500 $6,000 $5,500 $4,500 $8,000 $9,149.87 $8,188.45 $7,407.20 ○ $7168.52
A hospital in NYC area bought a diagnostic machine at a cost of $40,000. Maintenance cost is expected to remain constant throughout the life of this machine at $2,000 per year. The salvage value is estimated to be “0” at the end of the useful life of 10 years. Determine the economic life of this machine. MARR = 10% A. 5 years B. 1 year C. 10 years D. 7 years