Please answer question 5, included 11.4 and11.5 (example problem A).

5. Resolve the Example Problem A (Table 11.4) of Section 11.5 using an investment of $60,000 instead of $50,000 and a loan for $30,000 instead of $20,000 and calculate all the values in Table 11.4 as well as the Present Worth of the Cash Flows and the Present Worth of the Profits using a Minimum Acceptable Rate of Return (MARR) of 15%. Table 11.4: Example Problem A-Loan with cash flows, profits, taxes, and MACRS depreciation Taxes Loan Interest Depr. Rate Depr. Amount Taxable Income Net Profits Paid LI(t) DR(t) NP(t) 0 Cash Loan Year Cash Flow Cash Revenue Expense End Flows After Flow Loan (t) R(t) E(t) CFBT(t) LCF(t) CFAL(T) O 0 50,000 -50,000 20,000 -30,000 1 30,000 14,000 16,000 -6,309 9,691 2 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 0 16,000 6 30,000 14,000 16,000 0 16,000 Total 180,000 134,000 46,000 -5,238 40,762 Present Worth (CFAT-0%) = 24,457 Present Worth (CFAT-15%) = 3,710 Present Worth (NP-15%) = 13,242 2,000 1,569 1,095 574 0 0 5,238 3 20.00 32.00 19.20 11.52 11.52 5.76 100 D(t) 0 10,000 16,000 9,600 5,760 5,760 2,880 50,000 TI(t) 0 4,000 -1,569 5,305 9,666 10,240 13,120 40,762 Cash Flow Cum After CFAT(t) Tax CFAT(t) ECFAT(t) -30,000 -30,000 8,091 -21,909 10,318 -11,591 7,569 -4,023 5,824 1,801 11,904 13,705 10,752 24,457 24,457 TP(t) 0 1,600 -628 2,122 3,867 4,096 5,248 16,305 2,400 -941 3,183 5,800 6,144 7,872 24,457 5 11.) LMUIVIT LLITUULLIVI UT LUMIVVVIIIIUAJIT FLOWS, DEPRECIATION, TAXES, AND PROFITS Example Problem A. China Electronics-USA wants to purchase a new set of tooling with a total cost including installation of $50,000. This tooling would have a MACRS-GDS recovery period of 5 years to determine the depreciation percentages and the study period would be for 6 years. A loan for $20,000 would be needed and it is planned to pay the loan off in 4 years with an interest rate of 10% and the loan payments for each of the 4 years would be $6,309.42. The project is expected to generate a revenue of $30,000 per year and the expected annual costs are $14,000. The desired rate of return for the company is 15%. Although the totals for the CFAT and NP are the same with zero required return considerations, they are quite different as to when they occur. They are very different when the 15% return is considered. The present worth of the cash flows is only $3,710 whereas the net profits are $13,242 and the payback period is 4 years. The calculations are in Table 11.4. . non 5. Resolve the Example Problem A (Table 11.4) of Section 11.5 using an investment of $60,000 instead of $50,000 and a loan for $30,000 instead of $20,000 and calculate all the values in Table 11.4 as well as the Present Worth of the Cash Flows and the Present Worth of the Profits using a Minimum Acceptable Rate of Return (MARR) of 15%. Table 11.4: Example Problem A-Loan with cash flows, profits, taxes, and MACRS depreciation Taxes Loan Interest Depr. Rate Depr. Amount Taxable Income Net Profits Paid LI(t) DR(t) NP(t) 0 Cash Loan Year Cash Flow Cash Revenue Expense End Flows After Flow Loan (t) R(t) E(t) CFBT(t) LCF(t) CFAL(T) O 0 50,000 -50,000 20,000 -30,000 1 30,000 14,000 16,000 -6,309 9,691 2 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 -6,309 9,691 30,000 14,000 16,000 0 16,000 6 30,000 14,000 16,000 0 16,000 Total 180,000 134,000 46,000 -5,238 40,762 Present Worth (CFAT-0%) = 24,457 Present Worth (CFAT-15%) = 3,710 Present Worth (NP-15%) = 13,242 2,000 1,569 1,095 574 0 0 5,238 3 20.00 32.00 19.20 11.52 11.52 5.76 100 D(t) 0 10,000 16,000 9,600 5,760 5,760 2,880 50,000 TI(t) 0 4,000 -1,569 5,305 9,666 10,240 13,120 40,762 Cash Flow Cum After CFAT(t) Tax CFAT(t) ECFAT(t) -30,000 -30,000 8,091 -21,909 10,318 -11,591 7,569 -4,023 5,824 1,801 11,904 13,705 10,752 24,457 24,457 TP(t) 0 1,600 -628 2,122 3,867 4,096 5,248 16,305 2,400 -941 3,183 5,800 6,144 7,872 24,457 5 11.) LMUIVIT LLITUULLIVI UT LUMIVVVIIIIUAJIT FLOWS, DEPRECIATION, TAXES, AND PROFITS Example Problem A. China Electronics-USA wants to purchase a new set of tooling with a total cost including installation of $50,000. This tooling would have a MACRS-GDS recovery period of 5 years to determine the depreciation percentages and the study period would be for 6 years. A loan for $20,000 would be needed and it is planned to pay the loan off in 4 years with an interest rate of 10% and the loan payments for each of the 4 years would be $6,309.42. The project is expected to generate a revenue of $30,000 per year and the expected annual costs are $14,000. The desired rate of return for the company is 15%. Although the totals for the CFAT and NP are the same with zero required return considerations, they are quite different as to when they occur. They are very different when the 15% return is considered. The present worth of the cash flows is only $3,710 whereas the net profits are $13,242 and the payback period is 4 years. The calculations are in Table 11.4. . non