Assume MACRS depreciation is appropriate with a property class of three years.
 

Consider the following proposed capital investment in an engineering project and determine its (a) year-by-year ATCF, (b) after-tax AW, (c) annual equivalent EVA. Proposed capital investment Salvage value (end of year four) = $0 Annual expenses per year Gross revenues per year Depreciation method Useful life = $84,000 = $30,000 = $70,000 = Straight line = four years 50% Effective income tax rate (f) After-tax MARR (i) = 12% per year %3D