Jaguar Systems LLC is considering a highly specialized piece of equipment with an initial cost of $52000 and shipping/installation fee of $4,500. It will be used to produce additional income of $18,300 per year. At the end of 6 years it will be scrapped for a negligible amount. The estimated annual expenses for upkeep are $2,820 every year of operation. Using MACRS 7 years, 21% tax rate, and After-Tax MARR of 12%,

a. Calculate the NPW after taxes,

b. Is it a good investment?

Tax rate = (30+5)%, After Tax Real MARR (10+5)%, Inflation rate = 2%.

Year	MV	BV	dt	Depreciation Loss/Recapture	Tax	ATMV	O&M	Interest Cost	MV Loss	Taxable Income	Tax	ATMC
0	$79,000	$75,000	-	-	-		-	-	-	-	-	-
1	$75,000	$72,000					$10,000
2	$66,000	$69,000					$12,000
3	$59,000	$66,000					$15,000

c. Complete the table above using Excel and determine the ATMCs in each year

d. If a Challenger has a minimum EUAC of $25,000 when should the defender be replaced?