QUESTION 2 A company manufactures mother boards for various computer manufacturers. Design changes in computer processors, which are expected to increase sales, will require changes in their manufacturing operations. The cost basis of new equipment required is $500,000, and it can be depreciated using the 100%DB method. Annual revenues in real dollars are estimated to be $800,000. Annual expenses in real dollars are estimated to be $575,000. The estimated market value of equipment in actual dollars at the end the 2-year rice inflation is estimated at 4.9% per year, and the effective income tax rate is 40%. Fill in the blanks in the following table. Note that all the numbers in the table are in actual dollars. EOY BTCF d_k Tax ATCE 0 -500,000 -500,000 | 1 | 236,025|| (A) |-13,975|| -5,590|| 201,615 | 2 | (B) (C) (D) (E) (F) | 2 200,000 125,000 75,000 30,000 170,000 O 1. (A) 250,000; (B) 236,025; (C) 125,000; (D) 111,025; (E) 44,410; (F) 191,615 2. (A) 250,000; (B) 247,590; (C) 125,000; (D) 122,590; (E) 49,036; (F) 198,554 O 3. (A) 250,000; (B) 247,590; (C) 125,000; (D) 122,590; (E) 36,777; (F) 210,813 4. (A) 150,000; (B) 247,590; (C) 150,000; (D) 97,590; (E) 39,036; (F) 208,554 QUESTION 2 A company manufactures mother boards for various computer manufacturers. Design changes in computer processors, which are expected to increase sales, will require changes in their manufacturing operations. The cost basis of new equipment required is $500,000, and it can be depreciated using the 100%DB method. Annual revenues in real dollars are estimated to be $800,000. Annual expenses in real dollars are estimated to be $575,000. The estimated market value of equipment in actual dollars at the end the 2-year rice inflation is estimated at 4.9% per year, and the effective income tax rate is 40%. Fill in the blanks in the following table. Note that all the numbers in the table are in actual dollars. EOY BTCF d_k Tax ATCE 0 -500,000 -500,000 | 1 | 236,025|| (A) |-13,975|| -5,590|| 201,615 | 2 | (B) (C) (D) (E) (F) | 2 200,000 125,000 75,000 30,000 170,000 O 1. (A) 250,000; (B) 236,025; (C) 125,000; (D) 111,025; (E) 44,410; (F) 191,615 2. (A) 250,000; (B) 247,590; (C) 125,000; (D) 122,590; (E) 49,036; (F) 198,554 O 3. (A) 250,000; (B) 247,590; (C) 125,000; (D) 122,590; (E) 36,777; (F) 210,813 4. (A) 150,000; (B) 247,590; (C) 150,000; (D) 97,590; (E) 39,036; (F) 208,554