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5.1Steelwell LLC. is considering buying a new extrusion machine. Listed below is the economic data for the new investment Depreciable Capital - year 0 Salvage
5.1Steelwell LLC. is considering buying a new extrusion machine. Listed below is the economic data for the new investment Depreciable Capital - year 0 Salvage Value (FMV) (at the end of proiect life)-BV Non-depreciable Capital - vear 0 Non-depreciable Capital (returned at the end of $14,500 $3,500 $3,500 2 3 $4,500 $10,500 $2,000 2 $2,000 roiect life 4 5Expected Revenue ($ / yr 6 O&M Cost (/yr. 7 Useful life (vears Working Capital - year 0 Working Capital - (returned at the end of the project life $2,000 $5,000 10% 2 25% $0 $2,000 12% 9 10 Loan Proceeds -year 0 11 Interest on Loan per year 12 Loan Period - years 13 Tax rate - per year 14 ITC- year 0 15 | 1 16 MARR per year ITC year Note: All units are in thousands of dollars The new machine qualifies for a special 2-year MACRS Depreciation (with factors 0.55 in year 1 and 0.45 in year 2). Assume working capital is returned in year 2. Also assume that the company has income from other projects and this system is sold at the end of year 2
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