Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need the chart for this, but have no idea how to make it... Nordique Fab is an Arizona company dedicated to circuit board design

image text in transcribed

I need the chart for this, but have no idea how to make it...

Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has just acquired new workstations and modeling software for its four Valley of the Sun design facilities, at a cost of $4613,000 per site. This cost includes the hardware, software, transportation, and installation costs. Additional software training has been purchased at a cost of $27,000 per site. The estimated MV for each system during the fourth year is expected to be 5% of the total capital investment, 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 $1,070,000. 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 $240,000 (all sites combined). The company's marginal effective tax rate is 35% 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 MARK 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 (r k). Click the icon to view the interest and annuity table for discrete compounding when the MARK is 18% per year. Determine the after-tax cash flows for each year. (Round to the nearest dollar.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of The Fundamentals Of Financial Decision Making

Authors: Leonard C MacLean, William T Ziemba

1st Edition

9814417343, 978-9814417341

More Books

Students also viewed these Finance questions