A proposed cost-saving device has an installed cost of $795,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes (MACRS schedule). The required initial net working capital investment is $79,000, the tax rate is 22 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $121,000. What level of pretax cost savings do we require for this project to be profitable? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. Pretax cost savings $ 194,191.50 x

An elective project is currently under review. It requires an initial investment of $116,000 for equipment. The profit is expected to be $28,000 each year, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $22,000. Assume a MARR of 10%. Find an IRR for this project.

An electronic circuit board manufacturer is considering six mutually exclusive cost-reduction projects for its PC-board manufacturing plant. All have lives of 10 years and zero salvage value. The required investment, the estimated after-tax reduction in annual disbursements, and the gross rate of return arc given for each alternative in the following table: llte rate of return on incremental investments is given for each project as follows: Which project would you select according to the rate of return on incremental investment if it is stated that the MARR is 15%?

You must evaluate the purchase of a proposed spectrometer for   the R&D department. The base price is $150,000, and it would   cost another $22, 500 to modify the equipment for special use   by the firm. The equipment falls into the MACRS 3-year class   and would be sold after 3 years for $52, 500. The applicable   depreciation rates are 33%, 45% , 15%, and 7%. The   equipment would require a $13, 000 increase in net operating   working capital (spare parts inventory). The project would   have no effect on revenues, but it should save the firm $30,000   per year in before - tax labor costs. The firm's marginal federal -   plus - state tax rate is 40%. What is the initial investment outlay   for the spectrometer, that is, what is the Year 0 project cash   flow? Round your answer to the nearest cent. Negative amount   should be indicated by a minus sign. $ What are the project's   annual cash flows in Years 1, 2, and 3? Round your answers to   the nearest cent. In Year 1 $ In Year 2…