Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please i need answers for a and b and c ANSWERS FOR A AND B AND C NOT ONLY A THANKS... A company is considering

Please i need answers for a and b and c

image text in transcribed

image text in transcribed

ANSWERS FOR A AND B AND C NOT ONLY A THANKS...

A company is considering the purchase of a capital asset for $110.000. Installation charges needed to make the asset serviceable will total $25,000. The asset will be depreciated over six years using the straight-line method and an estimated salvage value (SV) of S24,000 The asset will be kept in service for six years after which it will be sold for $29,000 During its useful life it is estimated that the asset will produce annual revenues of S25 000 Operating and maintenance (O&M) costs are estimated to be $6.500 in the first year. These O&M costs are projected to increase by $1,500 per year each year thereafter. The after tax MARR is 9% and the effective tax rate is 25% a. Compute the after-tax cash flows. b. Compute the after-tax present worth of the project, and use a uniform oradient in your formulation. c. The before-tax present worth of this asset is $57,642. By how much would the annual revenues have to increase to make the purchase of this asset justifiable on a before-tax basis? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year a. Calculate the after-tax cash flows and fill in the table below. (Round to the nearest dollar.) (A) BTCF, $ EOY (B) Depreciation, $ (C)=(A)-(B) Taxable income, D= -0.25(C) Income Taxes, $ (E) - (A)+(D) ATCF, $ 0 Discrete Compounding; i = 9% Uniform Series Single Payment N 1 Compound Amount Factor To Find F Given P F/P 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2 3 4 5 Present Worth Factor To Find P Given F P/F 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 Compound Amount Factor To Find F Given A FIA 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9.2004 11.0285 13.0210 15.1929 Present Worth Factor To Find P Given A P/A 0.9174 1.7591 2.5313 3.2397 3.8897 4.4859 5.0330 5.5348 5.9952 6.4177 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4785 0.3051 0.2187 0.1671 0.1329 0.1087 0.0907 0.0768 0.0658 Uniform Gradient Gradient Gradient Uniform Present Series Worth Factor Factor To Find P To Find A Given G Given G P/G A/G 0.0000 0.0000 0.8417 0.4785 2.3860 0.9426 4.5113 1.3925 7.1110 1.8282 10.0924 2.2498 13.3746 2.6574 16.8877 3.0512 20.5711 3.4312 24.3728 3.7978 Capital Recovery Factor To Find A Given P A/P 1.0900 0.5685 0.3951 0.3087 0.2571 0.2229 0.1987 0.1807 0.1668 0.1558 6 7 8 9 10 A company is considering the purchase of a capital asset for $110.000. Installation charges needed to make the asset serviceable will total $25,000. The asset will be depreciated over six years using the straight-line method and an estimated salvage value (SV) of S24,000 The asset will be kept in service for six years after which it will be sold for $29,000 During its useful life it is estimated that the asset will produce annual revenues of S25 000 Operating and maintenance (O&M) costs are estimated to be $6.500 in the first year. These O&M costs are projected to increase by $1,500 per year each year thereafter. The after tax MARR is 9% and the effective tax rate is 25% a. Compute the after-tax cash flows. b. Compute the after-tax present worth of the project, and use a uniform oradient in your formulation. c. The before-tax present worth of this asset is $57,642. By how much would the annual revenues have to increase to make the purchase of this asset justifiable on a before-tax basis? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year a. Calculate the after-tax cash flows and fill in the table below. (Round to the nearest dollar.) (A) BTCF, $ EOY (B) Depreciation, $ (C)=(A)-(B) Taxable income, D= -0.25(C) Income Taxes, $ (E) - (A)+(D) ATCF, $ 0 Discrete Compounding; i = 9% Uniform Series Single Payment N 1 Compound Amount Factor To Find F Given P F/P 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2 3 4 5 Present Worth Factor To Find P Given F P/F 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 Compound Amount Factor To Find F Given A FIA 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9.2004 11.0285 13.0210 15.1929 Present Worth Factor To Find P Given A P/A 0.9174 1.7591 2.5313 3.2397 3.8897 4.4859 5.0330 5.5348 5.9952 6.4177 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4785 0.3051 0.2187 0.1671 0.1329 0.1087 0.0907 0.0768 0.0658 Uniform Gradient Gradient Gradient Uniform Present Series Worth Factor Factor To Find P To Find A Given G Given G P/G A/G 0.0000 0.0000 0.8417 0.4785 2.3860 0.9426 4.5113 1.3925 7.1110 1.8282 10.0924 2.2498 13.3746 2.6574 16.8877 3.0512 20.5711 3.4312 24.3728 3.7978 Capital Recovery Factor To Find A Given P A/P 1.0900 0.5685 0.3951 0.3087 0.2571 0.2229 0.1987 0.1807 0.1668 0.1558 6 7 8 9 10

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

An Introduction To Trading In The Financial Markets Market Basics

Authors: R. Tee Williams

1st Edition

0123748380, 9780123748386

More Books

Students also viewed these Finance questions