please answer within 30 minutes. please answer both the parts. Required:a. Calculate the following assuming straight-linedepreciation:i. Calculate the after-tax net income foreach of the ten years.ii. Calculate the after-tax cash flows foreach of the ten years.iii. Calculate the after-tax payback period.iv. Calculate the accrual accounting rate ofreturn on original investment for each ofthe ten years.V. Calculate the net present value (NPV).vi. Calculate the internal rate of return(IRR).b. Calculate the following assuming thatdepreciation expense is $200,000, $180,000,$160,000, $140,000, $120,000, $100,000,$80,000, $60,000, $40,000 and $20,000 foryears 1 through 10, respectively:i. Calculate the after-tax cash flows foreach of the ten years.ii. Calculate the after-tax payback period.Calculate the net present value (NPV).iii.iv.Calculate the internal rate of return(IRR). Emilio Corporation has the following informationabout the purchase of a new piece of equipment:Cash revenues less cashexpenses$300,000 per yearCost ofequipment$1,100,000Salvage value at the end of the 10thyear$100,000Increase in working capitalrequirementsTaxrate30 percentLife10 yearsThe cost of capital is 15 percent.$140,000

Emilio Corporation has the following information about the purchase of a new piece of equipment: Cash revenues less cash expenses $300,000 per year Cost of equipment $1,100,000 Salvage value at the end of the 10th year $100,000 Increase in working capital requirements Tax rate 30 percent Life 10 years The cost of capital is 15 percent. $140,000

Emilio Corporation has the following information about the purchase of a new piece of equipment: Cash revenues less cash expenses $300,000 per year Cost of equipment $1,100,000 Salvage value at the end of the 10th year $100,000 Increase in working capital requirements Tax rate 30 percent Life 10 years The cost of capital is 15 percent. $140,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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