Entropy Enterprise, Ltd., is considering a $100,000 heat recovery incinerator (7-year MACRS property class) that is expected to cause a net reduction in out-of-pocket costs of $30,000/year for 6 years(the study period). The incinerator will be depreciated using MACRS recovery allowances from Table 7-4, and no market value is expected. The effective income tax rate is 40%. Determine the PW of the ATCFs when the after-tax MARR is 8% per year.

TABLE 7-4 Modified ACRS Rates per TRA 86 Chap 1 Year 3-year 15-year 0.3333 0.4445 0.1481 0.0741 Class life (i.... property class) 5-year 7-year" 10-year 0.2000 0.1429 0.1000 0.3200 0.2449 0.1800 0.1920 0.1749 0.1440 0.1152 0.1249 0.1152 0.1152 0.0893 0.0922 0.0576 0.0892 0.0737 0.0893 0.0655 0.0446 0.0655 0.0656 0.0655 0.0328 0.0500 0.0950 0.0855 0.0770 0.0693 00375 Ouma 0.05% 0.064 00571 0.0528 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 0.041 0.0452 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 00447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 00446 00446 00446 00446 0.0446 0.0223 *These rates are determined by applying the 200% declining balance method to the appropriate propen class with the half-year convention applied to the first and last years. Rates for cach class life mustsen to 1 mm TABLE 7-4 Modified ACRS Rates per TRA 86 Chap 1 Year 3-year 15-year 0.3333 0.4445 0.1481 0.0741 Class life (i.... property class) 5-year 7-year" 10-year 0.2000 0.1429 0.1000 0.3200 0.2449 0.1800 0.1920 0.1749 0.1440 0.1152 0.1249 0.1152 0.1152 0.0893 0.0922 0.0576 0.0892 0.0737 0.0893 0.0655 0.0446 0.0655 0.0656 0.0655 0.0328 0.0500 0.0950 0.0855 0.0770 0.0693 00375 Ouma 0.05% 0.064 00571 0.0528 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 0.041 0.0452 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 00447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 00446 00446 00446 00446 0.0446 0.0223 *These rates are determined by applying the 200% declining balance method to the appropriate propen class with the half-year convention applied to the first and last years. Rates for cach class life mustsen to 1 mm