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Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ After-tax IRR: $ After-tax ERR: $ $ After-tax PW: $ After-tax AW: $ $ 80000 19500 17727 16115 14650 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10. 17349.4 11.79 % 11.34 % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.

Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ After-tax IRR: $ After-tax ERR: $ $ After-tax PW: $ After-tax AW: $ $ 80000 19500 17727 16115 14650 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10. 17349.4 11.79 % 11.34 % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ After-tax IRR: LA After-tax ERR: EA LA After-tax PW: $ After-tax AW: $ LA 80000 19500 17727 16115 14650 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10. 17349.4 11.79 % 11.34 % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
Transcribed Image Text:Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ After-tax IRR: LA After-tax ERR: EA LA After-tax PW: $ After-tax AW: $ LA 80000 19500 17727 16115 14650 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10. 17349.4 11.79 % 11.34 % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
A tractor for over-the-road hauling is to be purchased by AgriGrow for $80,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,800. Transportation cost savings are expected to be $140,000 per year; however, the cost of drivers is expected to be $53,000 per year, and operating expenses are expected to be $47.000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $5,800. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR after only 4 years. Click here to access the TVM Factor Table Calculator Part a Your answer is incorrect.
Transcribed Image Text:A tractor for over-the-road hauling is to be purchased by AgriGrow for $80,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,800. Transportation cost savings are expected to be $140,000 per year; however, the cost of drivers is expected to be $53,000 per year, and operating expenses are expected to be $47.000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $5,800. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR after only 4 years. Click here to access the TVM Factor Table Calculator Part a Your answer is incorrect.
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