MACRS depreciation Schedule

Interest Factors for Discrete Compounding when i=10%

i=15%

A special purpose machine tool set would cost $20,000. The tool set will be financed by a S10.000 bank loan repayable in two equal annual installments at 10% compounded annually. The tool is expected to provide annual (material) savings of $30,000 for two years and is to be depreciated by the MACRS three-year recovery period. The tool will require annual 08M costs in the amount of $5,000. The salvage value at the end ofthe two years i expected to be SB,000, Assuming a marginal ax ate of 40% and MARR of 15%, what is the net present worth of this project