Homework: HW5 Save 8 of 12 (6 complete) HW Score: 40%, 4.8 of 12 pts Score: 0 of 1 pt X Problem 10-30 (book/static) s Question Help The Balas Manufacturing Company is considering buying an overhead pulley system. The new system has a purchase price of $150,000, an estimated useful life and MACRS class life of five years, and an estimated salvage value of $10,000. The system is expected to enable the company to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective products made. A total annual savings of $95,000 will be realized if the new pulley system is installed. The company is in the 35% marginal tax bracket. The initial investment will be financed with 40% equity and 60% debt. The before-tax debt interest rate, which combines both short-term and long-term financing, is 12% with the loan to be repaid in equal annual installments over the project life. Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i = 12% per year. Click the icon to view the interest factors for discrete compounding when i = 20% per year. Period Net Arter-lax Lasn Flow $ - 60,000 $ 51,064 $ 56,769 Enter your answer in the edit fields and then click Check Answer. parts remaining Clear All Check Answer Homework: HW5 Save 8 of 12 (6 complete) HW Score: 40%, 4.8 of 12 pts Score: 0 of 1 pt X Problem 10-30 (book/static) s Question Help The Balas Manufacturing Company is considering buying an overhead pulley system. The new system has a purchase price of $150,000, an estimated useful life and MACRS class life of five years, and an estimated salvage value of $10,000. The system is expected to enable the company to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective products made. A total annual savings of $95,000 will be realized if the new pulley system is installed. The company is in the 35% marginal tax bracket. The initial investment will be financed with 40% equity and 60% debt. The before-tax debt interest rate, which combines both short-term and long-term financing, is 12% with the loan to be repaid in equal annual installments over the project life. Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i = 12% per year. Click the icon to view the interest factors for discrete compounding when i = 20% per year. Period Net Arter-lax Lasn Flow $ - 60,000 $ 51,064 $ 56,769 Enter your answer in the edit fields and then click Check Answer. parts remaining Clear All Check
