A large company is planning to purchase equipment costing $250,000 and will depreciate it fully using straight-line depreciation over 5 years. The company expects that the investment will have an annual benefit of $64,000. Each use of the equipment will also provide a benefit of $30. In 5 years, there will be no salvage value for the equipment. The company's combined marginal tax rate is 30%. Based on 18% after-tax MARR, how many uses of the equipment must the company have each year in order to justify its investment?

Q1: Choose the correct Before Tax Cash Flow Diagram for this scenario from the following choices.

Q2: For years 1 - 5, what is the Before-Tax Cash Flow (BTCF) value to be used?

Group of answer choices

64000-30X

64000+30X

30X-64000

-64000-30X

Q3:

For years 1 - 5, what is the straight-line depreciation (SL Dn) value to be used?

Group of answer choices

6X

50000

12800

250000

Q4:For years 1 - 5, what is the taxable-income (TI) value to be used?

Group of answer choices

51200+30X

14000-30X

14000+30X

14000+39X

Q5: For years 1 - 5, what is the income tax value to be used?

Group of answer choices

1400+9X

4200+9X

2520+5.4X

4200-90X

Q6: For years 1 - 5, what is the After-Tax Cash Flow (ATCF) value to be used?

Group of answer choices

9800-21X

59800+39X

59800+21X

68200+21X

Q7: What is the correct break-even equation setup?

Group of answer choices

-250000(A/P, 18%, 5)+59800+39X=0

-250000(P/A, 18%, 5)+9800-21X=0

-250000(A/P, 18%, 5)+59800+21X=0

-250000(P/A, 18%, 5)+59800+39X=0

Q8 What is the break-even value? Enter your answer in the form: 12345.67

Q9:Provide a statement to your answer to Part H.

Group of answer choices

C: The company needs the maximum amount found in part "g" per year for 5-year planning horizon to break-even

Both A & B

A: The company needs the exact amount found in part "g" per year for 5-year planning horizon to break-even

B: The company needs the minimum amount found in part "g" per year for 5-year planning horizon to break-even

G=30 G=30X Option A 64000 Option B 64000 0 1 5 0 1 5 i = 18% i = 18% 250,000 250,000 64000 +30X Option C Option D 0 1 0 5 i = 18% i = 18% 64000 +30X 250,000 250,000