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please answer fully and fill out table for year 1-6 Assume that you will bur and operate a piece of equipment. The initial cost is
please answer fully and fill out table for year 1-6
Assume that you will bur and operate a piece of equipment. The initial cost is $500,000. You estimate that the equipment wial generate $275,000 revenue; each year for six years. You also estimate that operating costs for the machine will be $75,000 cach year for six years. There will be a one-time repair cost at the end of year three, estimated at $100.000. The salvage value = $125,000. All estimates are in constant 2022 dollars. The inflation rate for reveases is estimated to be 3.0N. The inflation rate for operating costs and repain is nstimated to be 4.5%. You will depreciate the machine using the MACRS method, and the 5 -year category. Assume that neitative taxable amounts are allowed. Infloted voleres deain. with period one The federal tax fate = 21%. State tavis are 92 . a. Determine the net, after-tax cash flow, in actual $. b. Determine the depreciation and book value of the machine for each year. c. Determine the NPW of the actual-doliar, after-tax cash flow, if the MARR = 10% Step by Step Solution
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