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2. Elias wants to perform an after-tax evaluation of equivalent methods to electrostatically remove airbome particulate matter from clean rooms used to package liquid pharmaceutical
2. Elias wants to perform an after-tax evaluation of equivalent methods to electrostatically remove airbome particulate matter from clean rooms used to package liquid pharmaceutical products. Using the information shown, MACRS depreciation with n= 3 year, a 5-year study period, after-tax MARR = 7% per year, a T. of 34% and a spreadsheet, he obtained the results AWA - S-2176 and AW8 - $3545. Any tax effects when the equipment is salvaged were neglected. Method B was the better method. Use classical SL depreciation with n=5 years to select the better method after taxes on an annual worth basis. Calculate the CFAT series for each method, filling in the CFAT tables below. State the AW of CFAT for each method using standard conversion factor notation and calculate the actual after-tax AW's. Is the decision different from that reached using MACRS? First cost, $ Salvage value, $ Savings, S per year AOC, S per year Expected life, years Method A -100,000 10,000 35,000 -15,000 Method B - 150,000 20,000 45,000 -6,000 Method A: Year GI, S 0 E , S P and S, S D,S TI, S Taxes, S CFAT, S Method B: Year GI, S E , S P and S, S D, S TI, S Taxes, $ CFAT, S 0 111
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