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2 As an enginner in RedOak company, your department head asked you to perform an analysis of installing MAP/TOP in the manufacturing planning devision of
2 As an enginner in RedOak company, your department head asked you to perform an analysis of installing MAP/TOP in the manufacturing planning devision of your company. (MAP/TOP is a communications integration software system developed by Boeing). The entire system would be implemented and operated by one of two consultant groups: Hi Tone or Extra-S. The first cost (includes MAPTOP software, hardware, implementation and training costs) that your company will agree to pay is still in question. The possible variation of the initial cost estimate P is included in the consultants' proposals below. (100\% of P means use the whole amount of estimated P). The first cost of Hi-Tone is 105% of its P and the first cost of Extra-S is 100% of its P. Both system are depreciated based on 5 -year MACRS. Hi-Tone is sold for $130,000 in year 4 . Put in table the cash flow for both alternatives from year 0 to year 6 , Including CFBT, depreciation, depreciation recapture, taxable income, taxes, and ATCF using effective tax rate Te=38%. The After tax MARR for your company is 8%. a- Find the after tax present worth for both alternatives by hand (i.e. write down the equation of calculating PW of ATCF)
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