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Problem 4. Rubbermaid wanted to expand its existing plant that makes rubber parts in Akron. Rubbermaid will use the already existing extra building near
Problem 4. Rubbermaid wanted to expand its existing plant that makes rubber parts in Akron. Rubbermaid will use the already existing extra building near their plant for this expansion. It will cost them $1,900,000 to purchase new $200,000 of working capital to operate this plant's expansion. Rubbermaid expects to receive $480,000 in Revenue to after 5 years of operations and will sell the equipment for $600,000. Rubbermaid uses GDS method of depreciation, pays 21% in Federal taxes, 11.3925% in State taxes and has a Before-tax MARR of 10%. Complete an After-Tax Analysis for this expansion and state if the existing plant should be expanded or not? 52 Points
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