Calculate the AW value for Design A.

Calculate the AW value for Design B.

Based on the AW values, which should be chosen.

A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 28%, and MACRS depreciation is used. If the desired after-tax return on investment is 9% per year, which design should be chosen? Design A $1,240,000 $1,030,000 Design B $2,200,000 $1,020,000 Capital investment MV at end of useful life Annual revenues less expenses MACRS property class Useful life $190,000 $370,000 5 years 7 years 5 years 6 years GDS Recovery Rates (mk) Year 5-year Property Class 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 . Capital Recovery Factor To Find A Given P AIP Discrete Compounding; i = 9% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A Given P. Given F Given A Given A Given F FIP PIF FIA PIA AIF 1.0900 0.9174 1.0000 0.9174 1.0000 1.1881 0.8417 2.0900 1.7591 0.4785 1.2950 0.7722 3.2781 2.5313 0.3051 1.4116 0.7084 4.5731 3.2397 0.2187 1.5386 0.6499 5.9847 3.8897 0.1671 1.6771 0.5963 7.5233 4.4859 0.1329 1.8280 0.5470 9.2004 5.0330 0.1087 1.9926 0.5019 11.0285 5.5348 0.0907 2.1719 0.4604 13.0210 5.9952 0.0768 2.3674 0.4224 15.1929 6.4177 0.0658 1.0900 0.5685 0.3951 0.3087 0.2571 0.2229 0.1987 0.1807 0.1668 0.1558