Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please do by hand and not with excel. 6.Machine A was purchased two years ago for $10,000 and had an estimated market value of $0.0

Please do by hand and not with excel. image text in transcribed
6.Machine A was purchased two years ago for $10,000 and had an estimated market value of $0.0 at the end of its 5 years life. Annual operating cost is $1,000. Machine B has a cost of $15,000 with market value of $5,000 after 5 years. Annual operating cost of $600, and Machine A could be sold by $7,000. The MARR= 6%, Tax 40%, depreciation methods' (Straight line 5 Classic) (15 ptos) a.Using the outsider viewpoint ATCF, what is the (ATCF-EUAC) equivalent uniform annual cost of continuing the use of Machine A? (Defender if kept)) b. Using the outsider viewpoint ATCF, what is the (ATCF-EUAC) equivalent uniform annual cost of buying the Machine B? (Challenger) c.Make a final decision. CAB Taxable income D40) Taxess. 40 KEAD ATCF Defender Kept: Machine A (A) (B) BTCE Depreciation 0 1 2 3 (DAC) Taxes 40 (EAD ATCE Challenger Machine B SL (15.000-50001/522.000 (A) (C) A-B EOY BTCF Depreciation Taxable income 0 -15,000 1 600 2.000 -2.600 2 -600 2,000 -2,600 3 -600 2,000 -2,600 4 -600 2,000 -2,600 5 -600 2,000 -2,600 5 5,000 0 5,000 1.040 1,040 1,040 1,040 1,040 -2,000 6.Machine A was purchased two years ago for $10,000 and had an estimated market value of $0.0 at the end of its 5 years life. Annual operating cost is $1,000. Machine B has a cost of $15,000 with market value of $5,000 after 5 years. Annual operating cost of $600, and Machine A could be sold by $7,000. The MARR= 6%, Tax 40%, depreciation methods' (Straight line 5 Classic) (15 ptos) a.Using the outsider viewpoint ATCF, what is the (ATCF-EUAC) equivalent uniform annual cost of continuing the use of Machine A? (Defender if kept)) b. Using the outsider viewpoint ATCF, what is the (ATCF-EUAC) equivalent uniform annual cost of buying the Machine B? (Challenger) c.Make a final decision. CAB Taxable income D40) Taxess. 40 KEAD ATCF Defender Kept: Machine A (A) (B) BTCE Depreciation 0 1 2 3 (DAC) Taxes 40 (EAD ATCE Challenger Machine B SL (15.000-50001/522.000 (A) (C) A-B EOY BTCF Depreciation Taxable income 0 -15,000 1 600 2.000 -2.600 2 -600 2,000 -2,600 3 -600 2,000 -2,600 4 -600 2,000 -2,600 5 -600 2,000 -2,600 5 5,000 0 5,000 1.040 1,040 1,040 1,040 1,040 -2,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managing Finance A Socially Responsible Approach

Authors: D. Crowther

1st Edition

0750661011, 978-0750661010

More Books

Students also viewed these Finance questions

Question

What factors contribute to distortions in memory?

Answered: 1 week ago