Equipment Details: 1. After-Tax MARR=6%. 2. Depreciation Rate=35% 3. Income tax rate=40%. 4. Inflation rate=0%. 3 Page 5. Salvage values and annual expenses (O+M) as shown the table. CTF (After-Tax) Analysis of Challenger: Q16-Q22 Before-Tax Operating Expenses EOY 0 1 2 3 4 5 6 7 8 Before-Tax Market Value 900,000 720,000 576,000 460,800 368,640 294,912 235,930 188.744 150,995 80,000 96,000 115,200 138.240 165,888 199,066 238,879 286,654 16. The capital tax factor (CTF) with the half-year rule is between 17. 18. 19. The capital salvage factor (CSF) (4 decimals; no rounding) is The equipment's first year service cost is The equipment's annual equivalent cost for a two-year service life is The equipment's annual equivalent cost for a four-year service life is The equipment's annual equivalent cost for a seven-year service life is How many (full) years should the equipment be in service to minimize after-tax costs? 20. 21. 22. Equipment Details: 1. After-Tax MARR=6%. 2. Depreciation Rate=35% 3. Income tax rate=40%. 4. Inflation rate=0%. 3 Page 5. Salvage values and annual expenses (O+M) as shown the table. CTF (After-Tax) Analysis of Challenger: Q16-Q22 Before-Tax Operating Expenses EOY 0 1 2 3 4 5 6 7 8 Before-Tax Market Value 900,000 720,000 576,000 460,800 368,640 294,912 235,930 188.744 150,995 80,000 96,000 115,200 138.240 165,888 199,066 238,879 286,654 16. The capital tax factor (CTF) with the half-year rule is between 17. 18. 19. The capital salvage factor (CSF) (4 decimals; no rounding) is The equipment's first year service cost is The equipment's annual equivalent cost for a two-year service life is The equipment's annual equivalent cost for a four-year service life is The equipment's annual equivalent cost for a seven-year service life is How many (full) years should the equipment be in service to minimize after-tax costs? 20. 21. 22