Holster Tool Company in Killeen, Texas is considering purchasing a new CNC machine used for manufacturing custom parts for the M1A2 Abrams main battle tank used by the U.S. Army. Use the cost and revenue estimates in the table below to answer the following questions. Estimates Rate Remarks Initial Cost $2.5M includes installation M & O Cost $18,000 annual increases of $2,000 starting in year 2 Labor Cost $125,000 annual, includes overtime Useful Life 10 years salvage value = $250,000 MARR 15% annual Depreciation MACRS use GDS value of n = 7 Federal Tax Rate 34.426% annual corporate income tax State Tax Rate 8.5% annual corporate income tax Production 3.5 parts per week for 50 weeks Projected Sales $200,000 quarterly a. (10 points) Calculate the annual depreciation and book value at year 4. 6. (5 points) Calculate the effective annual tax rate for Holster Tool Company. C. (5 points) Calculate the depreciation recapture for the proposed CNC machine. d. (20 points) Calculate the CFAT for the first 3 years only. Holster Tool Company in Killeen, Texas is considering purchasing a new CNC machine used for manufacturing custom parts for the M1A2 Abrams main battle tank used by the U.S. Army. Use the cost and revenue estimates in the table below to answer the following questions. Estimates Rate Remarks Initial Cost $2.5M includes installation M & O Cost $18,000 annual increases of $2,000 starting in year 2 Labor Cost $125,000 annual, includes overtime Useful Life 10 years salvage value = $250,000 MARR 15% annual Depreciation MACRS use GDS value of n = 7 Federal Tax Rate 34.426% annual corporate income tax State Tax Rate 8.5% annual corporate income tax Production 3.5 parts per week for 50 weeks Projected Sales $200,000 quarterly a. (10 points) Calculate the annual depreciation and book value at year 4. 6. (5 points) Calculate the effective annual tax rate for Holster Tool Company. C. (5 points) Calculate the depreciation recapture for the proposed CNC machine. d. (20 points) Calculate the CFAT for the first 3 years only