An injection molding machine can be purchased and installed for $76,000. It has a GDS recovery period of 5 years under the MACRS, but it will only be kept in service for four years. The net savings that can be attributed to this machine is estimated to be $26,000 in the first year, and to decrease by $2,600 each year in the following years. It is believed that the machine can be sold for $31,200 at the end of year 4. An effective income tax rate of 29% is used by the company and the after tax MARR equals 17%. Should a recommendation be made to purchase the machine? Why or why not? Click the icon to view the GDS Recovery Rates (ra). Click the icon to view the interest and annuity table for discrete compounding when the MARR is 17% per year. The PW value of purchasing the machine is s (Round to the nearest dollar.) this machine since it profitable Year 20-year 1 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) 3-year 5-yeara 7-year 10-year 15-year! 0.3333 0.2000 0.1429 0.1000 0.0500 0.4445 0.3200 0.2449 0.1800 0.0950 0.1481 0.1920 0.1749 0.1440 0.0855 0.0741 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0375 0.0722 0.0668 Oon WN 4 0.0618 0.0571 0.0576 0.0892 0.0737 0.0528 0.0623 0.0590 0.0893 0.0655 0.0489 8 0.0446 0.0655 0.0590 0.0452 9 0.0656 0.0591 0.0447 10 0.0655 0.0590 0.0447 11 0.0328 0.0591 0.0446 12 0.0590 0.0446 13 0.0446 0.0591 0.0590 14 0.0446 15 0.0446 0.0591 0.0295 16 0.0446 0.0446 17 18 0.0446 19 0.0446 20 0.0446 21 0.0223 These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000. "These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places. Discrete Compounding; i = 17% Single Payment Uniform Series Compound Present Compound Present Sinking Amount Worth Amount Worth Fund Factor Factor Factor Factor Factor Capital Recovery Factor To Find A Given P. AIP To Find F Given P FIP To Find P Given F PIF To Find F Given A FIA To Find P Given A PIA To Find A Given F AIF N 1 1.1700 0.8547 1.0000 1.0000 1.1700 0.8547 1.5852 2 1.3689 0.7305 2.1700 0.4608 0.6308 1.6016 0.6244 3.5389 2.2096 0.2826 0.4526 0.3645 4 1.8739 0.5337 2.7432 0.1945 5.1405 7.0144 5 2.1924 0.4561 3.1993 0.1426 0.3126 000 W 0.3898 9.2068 3.5892 0.1086 0.2786 2.5652 3.0012 3.5115 0.3332 11.7720 3.9224 0.0849 0.2549 0.2848 14.7733 4.2072 0.0677 0.2377 9 4.1084 0.2434 18.2847 4.4506 0.0547 0.2247 10 4.8068 0.2080 22.3931 4.6586 0.0447 0.2147