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pls fill up tables with sol's thanks Certain new machinery used in manufacturing of motor vehicles, when placed in service, is estimated to cost $275,000.
pls fill up tables with sol's thanks
Certain new machinery used in manufacturing of motor vehicles, when placed in service, is estimated to cost $275,000. It is expected to reduce net annual operating expenses by $56,000 per year for 10 years and to have a $41,000 MV at the end of the 10th year. Assume that the firm is in the federal taxable income bracket of $335,000 to $10,000,000 and that the state income tax rate is 7.5%. State income taxes are deductible from federal taxable income. This machinery is to be depreciated using the MACRS (GDS). Develop the BTCFs and ATCFs and compute for the respective PWs at EOY O using an MARR of 12%. EOY Before-Tax Depreciation Taxable Cash Flow ($) ($) Income ($) Cash Flow for After-Tax Cash Income Taxes ($) Flow ($) 0 (1) 1 [2] 2 [3] 3 [4] [5] 4 5 6 [6] 7 18 17] 9 10 [8] PW(O) using MARR [9] (10) 8 [7] 9 10 [8] PW(O) using MARR [9] [10] [11] Based on Before-Tax Analysis, is this machinery worth investing in? {"YES"/"NO") Based on After-Tax Analysis, is this machinery worth investing in? {"YES"/"NO"} [12] Step by Step Solution
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