A B C D E F G H 1 J K L M N 1 Hi-Tone 2 Year GI OE 3 0 0 0 P&S -525000 4 1 390000 150000 5 2 390000 150000 6 3 390000 150000 525000 7 4 390000 8 5 390000 9 6 390000 150000 130000 150000 150000 125000 10 CFBT -525000 0 240000 0.2 240000 0.32 285000 0.192 370000 0.1152 240000 0.1152 365000 0.0576 Total D rate D1 BV1 D2 DR 0 105000 420000 168000 252000 100800 151200 60480 90720 60480 30240 30240 0 525000 0 0 Taxes 0 0 135000 51300 0 525000 0 105000 168000 100800 PW 0 39280 0 168250 CFAT -525000 188700 72000 27360 212640 139200 52896 337896 113800 43244 326756 11520 4377.6 235622.4 108960 41404.8 323595.2 ROR 16.29% 11 Extra-S 12 Year GI OE 13 0 0 0 P&S -800000 14 1 350000 120000 15 2 350000 120000 CFBT -800000 230000 230000 D rate D 0 0 0.2 0.32 160000 256000 16 3 350000 120000 230000 0.192. 153600 TI 0 70000 Taxes 0 26600 CFAT -800000 203400 -26000 -9880 239880 76400 29032 200968 17 4 350000 120000 230000 0.1152 92160 18 5 350000 120000 230000 0.1152 92160 19 6 350000 120000 210000 440000 0.0576 46080 20 Total 800000 PW 238201 137840 52379.2 177620.8 137840 52379.2 177620.8 183920 69889.6 370110.4 ROR 16.76% 21 22 23 Year 24 0 ATCF: Extra-S-Hi-Tone Extra-S Hi-Tone Extra-Hi -800000 -525000 -275000 25 26 2 27 3 200968 1 203400 188700 14700 239880 212640 27240 -337896 538864 28 4 177621 326756 -149135 29 5 177621 30 6 370110 31 32 235622 -58001.6 323595 46515.2 AROR 17.99% Project Part (B) 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 MAP/TOP 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). First cost estimate P, $ Hi Tone -500,000 Extra-S -800,000 Actual first cost ($) 1.05(-500,000)=-525,000 -800,000 AOC $/year -150,000 -120,000 Salvage value, $ 125,000 210,000 Life of contract, years 3 6 Annual Revenue 390,000 350,000 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). Answer: b- Find the PW of ATCF for both alternative using NPV function, select the better alternative. Answer: 2 points c-Use IRR function to find the after tax ROR of each alternative. Answer: d-Use ROR analysis for ATCF to selet the suitable alternative. Answer: 2 points 51 points 10 points +