Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,800. Henredon will borrow $100,000 at 13.8% over 6 years, paying only interest each year and paying all the principle in the sixth year. It will produce $49,000 in net revenue each year during its life. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 7-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 3.9% a. Determine the actual after-tax cash flows for each year. ATCF = $ ATCF1 = $ ATCF2 = $ ATCF3 = $ ATCF4 = $ ATCF5 = $ ATCF6 = $ ATCF7 = $ ATCF8 = $ ATCF, = $ ATCF 10 = $ ATCF 11 = $ ATCF 12 = $ b. Determine the PW of the after-tax cash flows. PWST = $ c. Determine the AW of the after-tax cash flows. AWT = $ d. Determine the FW of the after-tax cash flows. FWST = $ e. Determine the combined IRR of the after-tax cash flows. IRR = % f. Determine the combined ERR of the after-tax cash flows. ERR = % g. Determine the real IRR of the after-tax cash flows. IRR, = % h. Determine the real ERR of the after-tax cash flows. ERR, = % Parts a-d: Round your answer to 2 decimal places. The tolerance is 5. Parts e-h: Round your answer to 2 decimal places and present in percentage format. The tolerance is +0.1. Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,800. Henredon will borrow $100,000 at 13.8% over 6 years, paying only interest each year and paying all the principle in the sixth year. It will produce $49,000 in net revenue each year during its life. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 7-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 3.9% a. Determine the actual after-tax cash flows for each year. ATCF = $ ATCF1 = $ ATCF2 = $ ATCF3 = $ ATCF4 = $ ATCF5 = $ ATCF6 = $ ATCF7 = $ ATCF8 = $ ATCF, = $ ATCF 10 = $ ATCF 11 = $ ATCF 12 = $ b. Determine the PW of the after-tax cash flows. PWST = $ c. Determine the AW of the after-tax cash flows. AWT = $ d. Determine the FW of the after-tax cash flows. FWST = $ e. Determine the combined IRR of the after-tax cash flows. IRR = % f. Determine the combined ERR of the after-tax cash flows. ERR = % g. Determine the real IRR of the after-tax cash flows. IRR, = % h. Determine the real ERR of the after-tax cash flows. ERR, = % Parts a-d: Round your answer to 2 decimal places. The tolerance is 5. Parts e-h: Round your answer to 2 decimal places and present in percentage format. The tolerance is +0.1
