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help pls Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has just acquired new workstations and modeling software for
help pls
Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has just acquired new workstations and modeling software for its two "Valley of the Sun" design facilities, at a cost of $435,000 per site. This cost includes the hardware, software, transportation, and installation costs. Additional software training has been purchased at a cost of $22,000 per site. The estimated MV for each system during the fourth year is expected to be 5% of the system cost, at which time the systems will all be sold. The company believes that use of the new systems will enhance their circuit design business, resulting in a total increase in annual income of $1,090,000. The engineering design manager wants to determine the tax implications of this purchase. He estimates that annual operating and maintenance costs on the systems will be approximately $270,000 (all sites combined). The company's marginal effective tax rate is 26% and the MACRS depreciation method (with a five year GDS recovery period) will be used. Determine the after-tax cash flows for this project. If the after-tax MARR is 18% per year, would you recommend this investment? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). Determine the after-tax cash flows for each year. (Round to the nearest dollar.) \begin{tabular}{|c|c|c|c|c|} \hline \multirow[b]{2}{*}{ Asset Class } & \multicolumn{2}{|l|}{ MACRS Class Lives and Recovery Periods } & \multicolumn{2}{|c|}{ Recovery Periods } \\ \hline & Descriptions of Assets & Class Life & GDS & ADS \\ \hline 00.11 & Office furniture and equipment & 10 & 7 & 10 \\ \hline 00.12 & Information systems, including computers & 6 & 5 & 5 \\ \hline 00.22 & Automobiles, taxis & 3 & 5 & 5 \\ \hline 00.23 & Buses & 8 & 5 & 9 \\ \hline 00.241 & Light general purpose trucks & 4 & 5 & 5 \\ \hline 00.242 & Heavy general purpose trucks & 6 & 5 & 6 \\ \hline 00.26 & Tractor units for use over the road & 4 & 3 & 4 \\ \hline 01.1 & Agriculture & 10 & 7 & 10 \\ \hline 10.0 & Mining & 10 & 7 & 10 \\ \hline 132 & Production of petroleum and natural gas & 14 & 7 & 14 \\ \hline 13.3 & Petroleum refining & 16 & 10 & 16 \\ \hline 15.0 & Construction & 6 & 5 & 6 \\ \hline 22.3 & Manufacture of carpets & 8 & 5 & 9 \\ \hline 24.4 & Manufacture of wood products and furniture & 10 & 7 & 10 \\ \hline 28.0 & Manufacture of chemicals and allied products & 8.5 & 5 & 8.5 \\ \hline 30.1 & Manufacture of rubber products & 14 & 7 & 14 \\ \hline 322 & Manufacture of cement & 20 & 15 & 20 \\ \hline 34.0 & Manufacture of fabricated metal products & 12 & 7 & 12 \\ \hline 36.0 & Manufacture of electronic components, products, and systems & 6 & 5 & 6 \\ \hline 37.11 & Manufacture of motor vehicles & 12 & 7 & 12 \\ \hline 372 & Manufacture of aerospace products & 10 & 7 & 10 \\ \hline 48.12 & Telephone central office equipment & 18 & 10 & 18 \\ \hline 49.13 & Electric utility steam production plant & 28 & 20 & 28 \\ \hline 49.21 & Gas ut ily distribution facilities & 35 & 20 & 35 \\ \hline 79.0 & Recreation & 10 & 7 & 10 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ GDS Recovery Rates (rh) for the Six Personal Property Classes } \\ \hline \multirow[b]{2}{*}{ Year } & \multicolumn{6}{|c|}{ Recovery Period (and Property Class) } \\ \hline & 3 -year 3 & 5 -year a & 7 -year 8 & 10 -year a & 15 -year 0 & 20 -year 0 \\ \hline 1 & 0.3333 & 0.2000 & 0.1429 & 0.1000 & 0.0500 & 0.0375 \\ \hline 2 & 0.4445 & 0.3200 & 0.2449 & 0.1800 & 0.0950 & 0.0722 \\ \hline 3 & 0.1481 & 0.1920 & 0.1749 & 0.1440 & 0.0855 & 0.0668 \\ \hline 4 & 0.0741 & 0.1152 & 0.1249 & 0.1152 & 0.0770 & 0.0618 \\ \hline 5 & & 0.1152 & 0.0893 & 0.0922 & 0.0693 & 0.0571 \\ \hline 6 & & 0.0576 & 0.0892 & 0.0737 & 0.0623 & 0.0528 \\ \hline 7 & & & 0.0893 & 0.0655 & 0.0590 & 0.0489 \\ \hline 8 & & & 0.0446 & 0.0655 & 0.0590 & 0.0452 \\ \hline 9 & & & & 0.0656 & 0.0591 & 0.0447 \\ \hline 10 & & & & 0.0655 & 0.0590 & 0.0447 \\ \hline 11 & & & & 0.0328 & 0.0591 & 0.0446 \\ \hline 12 & & & & & 0.0590 & 0.0446 \\ \hline 13 & & & & & 0.0591 & 0.0446 \\ \hline 14 & & & & & 0.0590 & 0.0446 \\ \hline 15 & & & & & 0.0591 & 0.0446 \\ \hline 16 & & & & & 0.0295 & 0.0446 \\ \hline 17 & & & & & & 0.0446 \\ \hline 18 & & & & & & 0.0446 \\ \hline 19 & & & & & & 0.0446 \\ \hline 20 & & & & & & 0.0446 \\ \hline 21 & & & & & & 0.0223 \\ \hline \end{tabular}Step by Step Solution
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