A tractor for over-the-road hauling is to be purchased by AgriGrow for $75,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,500. Transportation cost savings are expected to be $120,000 per year; however, the cost of drivers is expected to be $45,000 per year, and operating expenses are expected to be $41,000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $5,500. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW.AW.IRRand ERR after only 4 years. Click here to access the TVM Factor Table Calculator Parta Your answer is partially correct. Use straight-line depreciation (no half-year convention) End of Year ATCF 0 $ - 75000 1 $ 28479 Use straight-line depreciation (no half-year convention). End of Year ATCF 0 $ -75000 1 $ 28479 2 $ 28479 3 $ 28479 $ 39437 22760 After-tax PW: $ After-tax AW: $ 7180 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10 After-tax IRR: 22.66 % After-tax ERR: 1.2266 %6 Use MACRS-GDS and state the appropriate property class. End of Year ATCF O -75000 1 28479 2 $ $ $ $ $ 28479 3 28479 4 39437 22760 After-tax PW: $ After-tax AW: $ 7180 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10. After-tax IRR: After-tax ERR: % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is +0.2. Property Class: Save for Later Attempts: 1 of 3 used Submit Answer A tractor for over-the-road hauling is to be purchased by AgriGrow for $75,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,500. Transportation cost savings are expected to be $120,000 per year; however, the cost of drivers is expected to be $45,000 per year, and operating expenses are expected to be $41,000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $5,500. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW.AW.IRRand ERR after only 4 years. Click here to access the TVM Factor Table Calculator Parta Your answer is partially correct. Use straight-line depreciation (no half-year convention) End of Year ATCF 0 $ - 75000 1 $ 28479 Use straight-line depreciation (no half-year convention). End of Year ATCF 0 $ -75000 1 $ 28479 2 $ 28479 3 $ 28479 $ 39437 22760 After-tax PW: $ After-tax AW: $ 7180 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10 After-tax IRR: 22.66 % After-tax ERR: 1.2266 %6 Use MACRS-GDS and state the appropriate property class. End of Year ATCF O -75000 1 28479 2 $ $ $ $ $ 28479 3 28479 4 39437 22760 After-tax PW: $ After-tax AW: $ 7180 For dollar amounts, carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10. After-tax IRR: After-tax ERR: % For rates, carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is +0.2. Property Class: Save for Later Attempts: 1 of 3 used Submit
