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Perform an after-tax cash flow analysis on the following data on the replacement of an old equipment with a more energy-afficient version. Use an effective tax rate of 30% and the straight-line method for depreciation. Initial Investment: 500,000 Useful life: 5 years Terminal Value: 50,000 Annual Revenues, 240,000 Annual Expenses Power: 75,000 Maintenance: 25,000 Property Insurance: 20,000   1. If the after-tax MARR is 12%, what is the net present worth (in pesos) of replacing the old equipment? (2 decimal places) 2. After evaluation, is the replacement of the old equipment economically feasible?

Perform an after-tax cash flow analysis on the following data on the replacement of an old equipment with a more energy-afficient version. Use an effective tax rate of 30% and the straight-line method for depreciation. Initial Investment: 500,000 Useful life: 5 years Terminal Value: 50,000 Annual Revenues, 240,000 Annual Expenses Power: 75,000 Maintenance: 25,000 Property Insurance: 20,000   1. If the after-tax MARR is 12%, what is the net present worth (in pesos) of replacing the old equipment? (2 decimal places) 2. After evaluation, is the replacement of the old equipment economically feasible?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...
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Perform an after-tax cash flow analysis on the following data on the replacement of an old equipment with a more energy-afficient version. Use an effective tax rate of 30% and the straight-line method for depreciation.

Initial Investment: 500,000
Useful life: 5 years
Terminal Value: 50,000
Annual Revenues, 240,000

Annual Expenses

Power: 75,000
Maintenance: 25,000
Property Insurance: 20,000

 

1. If the after-tax MARR is 12%, what is the net present worth (in pesos) of replacing the old equipment? (2 decimal places)

2. After evaluation, is the replacement of the old equipment economically feasible? 

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