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(15 pts) 6- A company is considering the purchase of a capital asset for $135,000. Installation charges needed to make the asset serviceable will total

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(15 pts) 6- A company is considering the purchase of a capital asset for $135,000. Installation charges needed to make the asset serviceable will total $25,000. The asset will be depreciated over six years using the straight-line method and an estimated salvage value (SV6) of S10,000. The asset will be kept in service for six years, after which it will be sold for $30,000. During its useful life, it is estimated that the asset will produce annual revenues of $40,000. Operating and maintenance (O&M) costs are estimated to be $8,000 in the first year. These O&M costs are projected to increase by $1,200 per year each year thereafter. The after-tax MARR is 12% and the effective tax rate is 40%. Calculate the missing parts identified as "a", "b", "e", and on the below table. (15 pts) o Option 1 EOY Before-tax Cash Depreciation Taxable Income After-tax Cash Flow Deduction Income Taxes Flow 0 a 1 32,000 $25,000 $7,000 2.800 29,200 2 30,800 5.800 2,320 28.480 25,000 25,000 3 29.600 4.600 1.840 4 28.400 25,000 3,400 1.360 27,040 5 27.200 25,000 2.200 880 26,320 26,000 25,000 1.000 400 25,600 6 Option 1

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