Assume you have been hired to evaluate an investment required by EPA for a waste management system for a nearby hog operation. The system will cost $350,000 and will last 30 years but only depreciated for 10 years. Assuming straight line depreciation, the salvage value is zero for depreciation. The actual expected terminal value is $50,000 which will be received in 30 years time. The system has a $3,250 annual maintenance cost. The marginal tax rate is 28% and the after-tax cost of capital is 8.25%. The production of hog will require feed at $23,000 per year and the operation will produce $60,000 in income each year.

Prepare a net present cost budget for the capital investment in the space below.

All answers should be rounded to two places to the right of the decimal.

Item	Pre-Tax Flow	After-tax Flow	Years	Discount Rate	PV Factor	Present Value
Waste System	-$350,000	-$350,000	0	0.0825	1.00
Depreciation Shield			1-10	0.0825
Terminal Value			30	0.0825
Maintenance Costs			1-30	0.0825
NPV
NPC

Using the information in the previous question regarding the $350,000 investment, what is the capital recovery factor? Round your answer to two places to the right of the decimal.

What is the annualized capital recovery cost in pre-tax terms for this $300,000 investment?

Once again using the $350,000 investment, finalize the NPV and annual budget for this problem in the space below.

All answers should be rounded to two places to the right of the decimal.

Hint: The first blank in the capital line is the NPV from the first part of this table.

Once again using the $300,000 investment, finalize the NPV and annual budget for this problem in the space below.

All answers should be rounded to two places to the right of the decimal.

Hint: The first blank in the capital line is the NPV from the first part of this table.

Item	Pre-tax Amount	After-tax Amount	Time	Discount Rate	P.V. Factor	Present Value	Annual After-tax	Annual Pre-tax
Revenue			1-30	0.0825
Feed			1-30	0.0825
Capital				0.0825
NPV

Based on your calculations in the past few problems regarding the $350,000 investment, how would you describe the investment opportunity?