D E F H G CAPITAL BUDGETING WITH INCOME TAXES Montreal Paper Company must purchase a paper sorter to replace its existing one on January 1, 2022. This is an essential investment because manual sorting is too demanding and causes physical problems for employees. Two models that would adequately meet the company's needs are the price and Allen models. Information related to each model includes: $ $ Cost of machines Working Capital needed Salvage value Life - years Annual savings of operating costs CCA Income Tax rate After-tax cost of capital Price 51,600 $ 20,000 $ $ 8 24,000 $ Allen 103,200 25,000 10,000 8 40,000 $ 30% 25% 12% Required: A Compute the after-tax net present value, internal rate of return, payback periods and profitability index for both models u Price YEAR YEAR Annual Net Cash Flow ompute the after tax net present value, internal rate of return, payback periods and profitability index for both models using the total-cost approach Price Allen YEAR YEAR Annual No Cash FW Amunt Cashow 172 12 31 22 123123 12:31-24 12-31-25 12-01-20 123127 12:31:21 12-31-29 12-31-29 1-1-92 12-31-22 12-31 23 12-31-24 12-31-25 12 31 20 12 31 27 12 31 20 12-31-20 12-31-29 CC CCA SCHEDULE -50% BASIS YEAR ADON CCA END YEAR ADO'N OPEN UCC CCA RATE OPEN UCC Ucc 2002 2004 2005 2026 2127 2028 2009 2002 2023 2004 20:25 2026 2027 2028 2029 125120 N ADO'N CCA SCHOLI -80% BASIS CCA CCA RATE END UCC CAROLL 30% GASTS YEAR OPEN ADON CCA UCC CCA RATE 2002 2023 2004 2005 2000 2027 2000 2000 CALCULATE CASHFLOW AFTER TAX CFAD CALCULATE CASHFLOW AFTER TAX CFAT CFAT Payback CFAT 1123 1124 125 -10 127 126 120 YEAR 1-122 12 31 22 12-31 23 123124 12-31-25 12-31 20 12-31.27 123120 123129 12:31 20 Net Present Value Not Present Value Internal Rate of Return Internal Role of Return CALCULATE CASTELOW AFTER TAKICLAT CALCULATE CASHFLOW AFTER TAX FEAT KTER YANGA MLAR 11122 CEAT Payback YEAR CHAT 3122 5123 135135 19:31:34 12:31 123120 123122 13:3120 12:31 123128 112 31 13124 123133 1912 123131 12:31 12:31 123123 Present Value Net Post Value namna altum Im Rate offer Payback your Payback year Probisty idea Probindex w you recomand wyd this record D E F H G CAPITAL BUDGETING WITH INCOME TAXES Montreal Paper Company must purchase a paper sorter to replace its existing one on January 1, 2022. This is an essential investment because manual sorting is too demanding and causes physical problems for employees. Two models that would adequately meet the company's needs are the price and Allen models. Information related to each model includes: $ $ Cost of machines Working Capital needed Salvage value Life - years Annual savings of operating costs CCA Income Tax rate After-tax cost of capital Price 51,600 $ 20,000 $ $ 8 24,000 $ Allen 103,200 25,000 10,000 8 40,000 $ 30% 25% 12% Required: A Compute the after-tax net present value, internal rate of return, payback periods and profitability index for both models u Price YEAR YEAR Annual Net Cash Flow ompute the after tax net present value, internal rate of return, payback periods and profitability index for both models using the total-cost approach Price Allen YEAR YEAR Annual No Cash FW Amunt Cashow 172 12 31 22 123123 12:31-24 12-31-25 12-01-20 123127 12:31:21 12-31-29 12-31-29 1-1-92 12-31-22 12-31 23 12-31-24 12-31-25 12 31 20 12 31 27 12 31 20 12-31-20 12-31-29 CC CCA SCHEDULE -50% BASIS YEAR ADON CCA END YEAR ADO'N OPEN UCC CCA RATE OPEN UCC Ucc 2002 2004 2005 2026 2127 2028 2009 2002 2023 2004 20:25 2026 2027 2028 2029 125120 N ADO'N CCA SCHOLI -80% BASIS CCA CCA RATE END UCC CAROLL 30% GASTS YEAR OPEN ADON CCA UCC CCA RATE 2002 2023 2004 2005 2000 2027 2000 2000 CALCULATE CASHFLOW AFTER TAX CFAD CALCULATE CASHFLOW AFTER TAX CFAT CFAT Payback CFAT 1123 1124 125 -10 127 126 120 YEAR 1-122 12 31 22 12-31 23 123124 12-31-25 12-31 20 12-31.27 123120 123129 12:31 20 Net Present Value Not Present Value Internal Rate of Return Internal Role of Return CALCULATE CASTELOW AFTER TAKICLAT CALCULATE CASHFLOW AFTER TAX FEAT KTER YANGA MLAR 11122 CEAT Payback YEAR CHAT 3122 5123 135135 19:31:34 12:31 123120 123122 13:3120 12:31 123128 112 31 13124 123133 1912 123131 12:31 12:31 123123 Present Value Net Post Value namna altum Im Rate offer Payback your Payback year Probisty idea Probindex w you recomand wyd this record
