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Project Section 3: You are considering buying an industrial equipment whose price is given below equipment whose price 380000. The equipment is expected to earn an annual revenue of $ 150,000. 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. Project Section 3: You are considering buying an industrial equipment whose price is given below. equipment whose price 380000. The equipment is expected to earn an annual revenue of $150,000. 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.

Project Section 3: You are considering buying an industrial equipment whose price is given below equipment whose price 380000. The equipment is expected to earn an annual revenue of $ 150,000. 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. Project Section 3: You are considering buying an industrial equipment whose price is given below. equipment whose price 380000. The equipment is expected to earn an annual revenue of $150,000. 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.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter14: Pricing Techniques And Analysis
Section: Chapter Questions
Problem 1.1CE: What life cycle cost concept begins raising concerns by year 5 with any electric vehicle (EV)? If...
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Project Section 3: You are considering buying an industrial equipment whose price is given below equipment whose price 380000. The equipment is expected to earn an annual revenue of $ 150,000. 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. Project Section 3: You are considering buying an industrial equipment whose price is given below. equipment whose price 380000. The equipment is expected to earn an annual revenue of $150,000. 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.
Transcribed Image Text:Project Section 3: You are considering buying an industrial equipment whose price is given below equipment whose price 380000. The equipment is expected to earn an annual revenue of $ 150,000. 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. Project Section 3: You are considering buying an industrial equipment whose price is given below. equipment whose price 380000. The equipment is expected to earn an annual revenue of $150,000. 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.
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