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[4] (30pts) You are the lead ISEN in-charge of a disposable mask production pilot that requires purchase of a standalone, multi-purpose production cell that
[4] (30pts) You are the lead ISEN in-charge of a disposable mask production pilot that requires purchase of a standalone, multi-purpose production cell that costs $250,000 plus another $75,000 for delivery, setup, and calibration. The production cell will be financed at 40% of the cost basis and paid off in two equal annual payments at 10% compounded annually. The production cell is expected to provide annual revenue of $1,000,000 for two years and is to be depreciated as a 3-year MACRS asset. This production cell will require annual O&M maintenance of $100,000 per year. The salvage value at the end of two years is expected to be $150,000. Assuming a marginal tax rate of 25% and a MARR of 15% find the following: [Note: answer parts (a) - (f) below) (a) Draw the before tax cash flow (BTCF) (b) Find the yearly depreciation (use table 1), any annual interest payments (use table 2), the taxable income for each year, and then calculate the yearly taxes Period Table 1 3-y MACRS Depreciation rate 1 2 3 4 Table 2. Period Yearly payment Interest Principal Balance 1 2
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