ATPW - AFTER TAX PRESENT WORTH

ATIRR - AFTER TAX INTERNAL RATE OF RETURN

ATERR- AFTER TAX EFFECTIVE RATE OF RETURN

3. A small business makes an investment of $1,000,000 in equipment that qualifies as 5-year equipment for MACRS-GDS depreciation. The firm takes the maximum Section 179 expense deduction, as well as 50% bonus depreciation. The $CBTCF profile for the investment is given below, including a $200,000 constant dollar salvage value at the end of the 5-year planning horizon. A 40% tax rate and 4% inflation rate apply. The ATMARR, is 8%. Determine a) ATPW, b) ATIRR, and c) ATERR, (5 pts each) EOY SCBTCF 0 -$1,000,000 300,000 400,000 500,00 600,000 900,00 4. In Problem 3, suppose 50% of the investment capital is obtained by borrowing money at an annual compound interest rate of 10%, and 4 payments are scheduled to occur at EOY = 2, 3, 4, and 5, with each payment being $25,000 greater than the previous year's payment. Determine the ATPW. (15 pts) EOY SCBTCF 0 $1,000,000 300,000 400,000 500,000 600,000 900,000