a)

b)

There are two alternatives for sensors and controls to adjust growth conditions including temperature and humidity in a greenhouse. The cash flows are shown in the cash flow table below. The company's MARR is 10%. The company has already determined that the annual worth of Alternative 1 is - $6,129 or ($6,129). Which alternative is preferred? Parameter Alternative 1 Alternative 2 Investment Cost $20,000 $30,000 Annual Savings $2,000 $500 Useful Life 5 years 5 years Salvage Value $7,000 $10,000 Reevaluate Problem 1 on an after-tax basis. The information for Alternative 1 is given in the cash flow tables below. The tax rate is 20% and the after-tax MARR is 9%. Depreciation is calculated from a GDS recovery period of 3 years. Use a negative sign convention that is consistent with the table. Alternative 1 EOY BTCF Depreciation Rate Depreciation Taxable Income Tax ATCE PW(9%) 0 ($20,000) ($20,000) ($20,000) 1 ($2,000) 0.3333 $6,666 ? $1,733 ($267) ($245) 2 ($2,000) ? $8,890 ($10,890) $2,178 $178 $150 3 ($2,000) 0.1481 $2,962 ($4,962) $992 ($1,008) ($778) 4 ($2,000) 0.0741 $1,481 ($3,481) $696 ($1,304) ($924) 5 ($2,000) ($2,000) $400 ? ? 5 $5,000 $5,000 ? ($4,000) ($2,600) Answer the following questions. What is the taxable income for EOY 1? What is the depreciation rate for EOY 2? What is the tax on the salvage value for EOY 5? What is the ATCF from the BTCF for EOY 5? What is the present worth of the ATCF from the BTCF for EOY 5? If the total present worth of the ATCF for alternative 2 is ($21,276), which alternative should be selected? There are two alternatives for sensors and controls to adjust growth conditions including temperature and humidity in a greenhouse. The cash flows are shown in the cash flow table below. The company's MARR is 10%. The company has already determined that the annual worth of Alternative 1 is - $6,129 or ($6,129). Which alternative is preferred? Parameter Alternative 1 Alternative 2 Investment Cost $20,000 $30,000 Annual Savings $2,000 $500 Useful Life 5 years 5 years Salvage Value $7,000 $10,000 Reevaluate Problem 1 on an after-tax basis. The information for Alternative 1 is given in the cash flow tables below. The tax rate is 20% and the after-tax MARR is 9%. Depreciation is calculated from a GDS recovery period of 3 years. Use a negative sign convention that is consistent with the table. Alternative 1 EOY BTCF Depreciation Rate Depreciation Taxable Income Tax ATCE PW(9%) 0 ($20,000) ($20,000) ($20,000) 1 ($2,000) 0.3333 $6,666 ? $1,733 ($267) ($245) 2 ($2,000) ? $8,890 ($10,890) $2,178 $178 $150 3 ($2,000) 0.1481 $2,962 ($4,962) $992 ($1,008) ($778) 4 ($2,000) 0.0741 $1,481 ($3,481) $696 ($1,304) ($924) 5 ($2,000) ($2,000) $400 ? ? 5 $5,000 $5,000 ? ($4,000) ($2,600) Answer the following questions. What is the taxable income for EOY 1? What is the depreciation rate for EOY 2? What is the tax on the salvage value for EOY 5? What is the ATCF from the BTCF for EOY 5? What is the present worth of the ATCF from the BTCF for EOY 5? If the total present worth of the ATCF for alternative 2 is ($21,276), which alternative should be selected