Company XYZ is attempting to expand its production line. To do this, it is proposed that the company needs to purchase a piece of land which costs $300,000 and hire a new group of workers which costs another $20,000,000. In addition, a set of manufacturing equipment needs to be purchased as well, which costs $70,000,000. The equipment would be disposed of at the end of the fifth year. The equipment could be depreciated using a GDS recovery period of five years. The expanded production line could increase the gross income of the company by $50,000,000 per year for five years, and operating expenses are estimated to be $10,000,000 per year for five years. Determine the After-Tax Cash Flow (ATC) using the table method described in the picture below. End of Year, k Before-Tax Cash Flow (BTCF) (B) Depreciation Deduction (C)=(A)-(B) Taxable Income (TI) (D)=-1(C) Cash Flow for Income Taxes (E) = (A) + (D) After-Tax Cash Flow (ATCF) Capital investment Capital investment 0 Ordinary income is positive (or negative) in sign Depreciation (positive in sign) TI can be negative or positive in sign (TI) (opposite in sign from TI) Market value (MV) After-tax cash flows from operations MV BY 1(MVBV) MV (MV-BV) Before-Tax IRR, PW, and so on (Computed from Col. A, using the before-tax MARR) BV = book value at end of year N After-Tax IRR, PW, and so on (Computed from Col. E using the after-tax MARR) Figure 7-5 General Format (Worksheet) for After-Tax Analysis; Determining the ATCF