Consider the following proposed capital investment in an engineering project and determine its

a. year-by-year ATCF,

b. after-tax AW,

c. annual equivalent EVA.

Assume MACRS depreciation is appropriate with a property class of three years.

Proposed capital investment = $85000

Salvage value (end of year four) = $0

Annual expenses per year = $26,000

Gross revenues per year = $60000

Useful life = 4 years

Effective income tax rate (t) = 45%

After-tax MARR (i) = 15% per year