All answers are correct EXCEPT d-1. I have tried several times and cannot get the correct answer. Answers that I have tried: 10,313.99 (incorrect), 13,524 (incorrect), 533,524.33 (incorrect) and (166,336.39) (incorrect). Please explain what I am doing wrong. My work is shown in the last picture. Thank you.
Check my work 13 DataPoint Engineering is considering the purchase of a new piece of equipment for $350,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $170,000 in nondepreciable working capital. $62,000 of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table 1211, Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. 2 points Year 1 eBook 2 Amount $218,000 182,000 162,000 157,000 106,000 126,000 3 4 5 6 Hint Print The tax rate is 25 percent. The cost of capital must be computed based on the following: Cost (aftertax) 12.30% Debt Preferred stock Common equity (retained earnings) Kd Weights 30% 10 60 15.40 20.00 a. Determine the annual depreciation schedule. (Do not round intermediate calculations. Round your depreciation base and annual depreciation answers to the nearest whole dollar. Round your percentage depreciation answers to 3 decimal places.) Check my work 13 a. Determine the annual depreciation schedule. (Do not round intermediate calculations. Round your depreciation base and annual depreciation answers to the nearest whole dollar. Round your percentage depreciation answers to 3 decimal places.) Year 2 points 1 2 eBook 3 Depreciation Base $ 350,000 350,000 350,000 350,000 350,000 350,000 Percentage Annual Depreciation Depreciation 0.200 $ 70,000 0.320 112,000 0.192 67,200 0.115 40,250 0.115 40,250 0.058 20,300 $ 350,000 Hint 4 5 Print 6 points b. Determine the annual cash flow for each year. Be sure to include the recovered working capital in Year 6. (Do not round intermediate calculations and round your answers to 2 decimal places.) eBook Hint Year 1 Print $ Cash Flow 181,000 164.500 2 3 4 138,300 127,813 89,563 161,575 5 6 13 c. Determine the weighted average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighted average cost of capital 17.23% 2 points eBook Hint Print d-1. Determine the net present value. (Use the WACC from part c rounded to 2 decimal places as a percent as the cost of capital (e.g., 12.34%). Do not round any other intermediate calculations. Round your answer to 2 decimal places.) Net present value $ (166,336.39) 350,000 8 xr midpoint 170,000 additional63200 Cash Flow 181,000 164,500 138,300 127812.5 .731 .624 .534 154,755 120,249.50 86,299.20 68,251.88 /1.17 /1.172 /1.17 /1.17 132,269.23 87,843.89 53,882.68 36,422.62 .855 89,562.5 .456 40,954.50 /1.17 18,679.80 161,575 .390 63,014.25 /1.17 24,565.39 Cash Inflow $533,524.33 Cash Outflow $520,000
