Eljer Plumbingware has purchased a new line of industrial robots.

The installed first cost of the robots is $200K and they are depreciated via MACRS on a 7 year life.

Eljer takes out a loan of $160K which is payable in equal installments over 4 years (each installment paid at the end of the year). The interest rate of the loan is 9%.

The robots are estimated to cost $30K the first year in maintenance, and this will increase by $2K each year. The cost savings of the robots is estimated to be $80K the first year and $100K thereafter.

The robots will be dismantled and sold after 5 years. Estimated salvage at that time is $20K.

Eljer has a tax rate of 21% and an after tax MARR of 12%.

Q:

1. Calculate the ATCF (After Tax Cash Flow) for this industrial robot for each year while it is in service.
2. Calculate the PW of the proposed project.

Please use Excel to figure the annual after-tax net cash flow, thanks.