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Please answer 6,7,8,9 EncryptCo is considering a project that will last 10 years. Its after tax MARR is 12% and its tax rate is 50%.
Please answer 6,7,8,9
EncryptCo is considering a project that will last 10 years. Its after tax MARR is 12% and its tax rate is 50%. The project is expected to bring in $2.8 million to the firm each year. The first cost will consist of purchases detailed in the table below. $500,000 Office Furniture Computers Software Vehicles $300,000 in the first year, $400,000 in the fifrth year. Salvage value of 0 in both cases. $600,000 in the first year. $600,000 in the fifth year. Salvage value of 0 in both cases. $3 million in the first year, $4 million in the 5th year. Each set of vehicles will be salvaged in the 5th year and at the end of the 10th year at the calculated book value at those times. $1.1 million in the first year, increasing by 3% each year until the end of the project. Employees -icini tvoroso Calculate the present worth of the office furniture using the UCC tables. (5 marks) Calculate the present worth of the computers using the UCC tables. (5 marks) Calculate the present worth of the software using the UCC tables. (5 marks) Calculate the present worth of the vehicles using the UCC tables. (5 marks) Calculate the present worth of the employee expenses. (8 marks) Set up the timing diagram of the project. Include all applicable taxes. (9 marks) Calculate the present worth of the project. (7 marks) Calculate the approximate after tax IRR of the project. (11 marks) 9. How sensitive is the project to variation in the first cost? Change the first cost by +/- 15% in steps of +/- 5%. Plot the Present Worth VS Variation in the First Cost. (15)Step by Step Solution
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