You are considering buying an industrial equipment whose price is 330000. The equipment is expected to earn an annual revenue of $125,000 The equipment will be depreciated under MACRS as a five-year recovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Your company's marginal tax rate is 35% over the project period. Perform the following: a) Determine the net after-tax cash flows for each period over the project life. b) Net present worth assuming company MARR = 15%. c) Annual equivalent cash flow company MARR = 15%. d) IRR of the project.

Determine whether the following contract described below is worthwhile ofundertaking after taxes if at the end of the 3-year of ownership the contract, you expect to sellboth depreciable equipment and land. Use present worth analysis under MARR = 8% andeffective tax rate.

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A firm must decide between two designs. Their effective income tax rate is 33%, and MACRS depreciation is used. If the desired after-tax return on investment is 12% per year, which design should be chosen? Design B $2,040,000 $1,150,000 Design A $940,000 $910,000 Capital investment MV at end of useful life $260,000 5 years Annual revenues less expenses $410,000 MACRS property class Useful life 5 years 6 years 7 years Click the icon to view the GDS Recovery Rates (r,) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Calculate the AW value for the Design A. AWA(12%) = $ (Round to the nearest dollar.) Calculate the AW value for the Design B. AWg(12%) = $ (Round to the nearest dollar.) Based on the AW values, should be chosen.

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3. A machine is purchased for S70,000. Life is 10 years with a S10,000 salvage. MARR is 10 and the tax rate is 50%. Cash operating costs are $4500 per year. Five year MACRS (20, 32, 19.2, 11.52, 11.52,5.76) depreciation will be used. Calculate the annual equivalent revenue requirements for this machine.

Marco has an asset valued $100 now. There is a 20% depreciation rate. Landing the asset is possible, at 10% rate of return. See the following Figure: Temps restant 0:25:53 Consumption later ($) 39 26 110 80 0 0 FF (store grain; 20% losses) FF (lend at 10%) Marco's IC (medium utility) 65 68 Consumption now ($) MRS MRT Marco's IC (low utility) Marco's endowment 100 Say if the following statements are correct. Veuillez choisir au moins une réponse. a. By doing nothing, Marco can consume $68 now, and $80 later O b. By lending $65, Marco can consume

N1  New equipment costing $35,000 has a 5 -year life and no salvage value. Benefits are expected to be $9000 per year. The equipment qualifies for 100% bonus depreciation. The firm has a 28% combined marginal income tax rate. What is the after-tax rate of return?

Equipment Depreciation A new piece of equipment cost acompany $15,000. Each year, for tax purposes, the companydepreciates the value by 15%. What value should thecompany give the equipment after 5 years?

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