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Two different machines are being considered for a certain process. Machine A has a first cost (purchase and installation) of $12,000 and annual operating expenses of $3,000 per year. It is expected to have a life of 6 years with no salvage value. Machine B has a first cost of $16,000, and it will have an annual operating cost of $500 per year. It will have a useful life of 3 years with a $6,000 salvage value. The effective incremental tax rate is 40%. The after-tax MARR is 15%. The capital gains tax rate is 25%. Assuming that the process will be needed for the foreseeable future, prepare a tabulation of the appropriate CFAT for both alternatives using a straight line depreciation method. Based on the CFAT table answer questions 9 to 15. Machine A 1 2 year CFBT Depreciation Book Value TI Taxes 0 -$12,000.00 $12,000.00 $3,000.00 $2,000.00 $10,000.00 - $5,000.00 $2,000.00 $3,000.00 $2,000.00 $8,000.00 -$5,000.00 -$2,000.00 3 $3,000.00 $2,000.00 $6,000.00 $5,000.00-$2,000.00 $3,000.00 $2,000.00 $4,000.00 $5,000.00 -$2,000.00 5 $3,000.00 $2,000.00 $2,000.00 $5,000.00 $2,000.00 6 $3,000.00 $2,000.00 $0.00 $5,000.00 $2,000.00 PW= $15.784.48+AW=-$4,170.84 CFAT $12,000.00 -$1,000.00 -$1,000.00 -$1,000.00 $1,000.00 -$1,000.00 -$1,000.00 4 Machine B year CFBT Depreciation Book Value TI Taxes CFAT 0 1 2 3 $16,000.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $3,333.33 $3,333.33 $3,333.33 $3,333.33 $3,333.33 $3,333.33 $16,000.00 $12,666.67 $3,833.33 $1,533.33 $9,333.33 $3,833.33 $1,533.33 $16,000.00 $3,833.33 $1,533.33 $12,666.67 -$3,833.33 $1,533.33 $9,333.33 $3,833.33 $1,533.33 $6,000.00 $3,833.33 $1,533.33 -$16,000.00 $1,033.33 $1,033.33 $8,966.67 $1,033.33 $1,033.33 $7,033.33 4 5 6 PW = $16,070.567 AW = $4,246.44 9. What is the depreciation in year 2 for machine A = 2,000 10. What is the depreciation in year 5 for machine B = 3,333.33 11. What is the CFAT in year 5 for machine B = -466.67 12. What are the taxes paid in year 3 for machine A = -2,000.00 13. What is the AW for Machine A = -4,170.84 14. What is the AW for Machine B = $4,246.44