Question 3 please!

1. You buy a machine that costs fifty thousand dollars but makes you fifteen grand every year. You sell it after five years for twenty thousand dollars. Determine the missing information in the table below, show your work for each calculation you make, and label your calculations according to the letters. Tax Rate = 30%. (50 points) YR. 0 1 2 3 4 STRAIGHT LINE MODIFIED ACCELERATED COST RECOVERY SUM OF THE YEARS DOUBLE DECLINING SYSTEM B.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. -$50k $50k $50k $50k -$50k $50k $50k $50k $50k +$15k $6k $44k $9k $2.7k F G $40K $5k $1.5k $13.5k L $30k N o P $10k $40k $5k $ $1.5k $13.5k +$15k B $38k $9k $2.7k $12.3k $8k H $7k $2.13 $12.9 M$20k $5k $1.5k $13.5k $16k $24k $1k $0.3k $15.3k +$15k $6k C $9k $2.7k $12.3k $6k $26k $9k $2.7k $12.3k $20k $15k $4.5k $10.5k $9.6k $14.4k $5.4k $ $1.62k $13.38k +$15k $6k $26k D $2.7k $12.3k $4k $22k 1 J $11.7k $20k $15k $4.5k $10.5k $5.76k $8.64 $9.24k $2.772k $12.228k A $6k $20k $29k E $26.3k $2K $20k $33k $9.9k K $20K $35k $10.5k $24.5k 0 R $26.36k $7.908k $27.092k $0 - - - $20k - S T U 5 "6" EXTRA CREDIT: What is the most commonly used depreciation schedule in the business world? (1 point) 2. Your Dad likes to brag about how he made fifty thousand dollars annually as an engineer in 1970. You hope you can "one-up" him with your offer letter right out of college in 2015 that promises you seventy thousand dollars annually. Can you? Why or why not? (25 points) EXTRA CREDIT: Describe a scenario in which you should ask for a raise. What equations and other information would you use to justify this to your boss? (3 points) 3. You are considering purchasing car insurance that costs $800. You don't want to be a "chump" if you don't have to be. You do some research, and you find out that there's only a 3% chance that you will get in a serious accident costing $500 in damages with insurance, but $13,000 without insurance. The potential for a small accident costing $300 in damages with or without insurance is 7%. The other 90% of the time, it is not probable you would wreck, and thus you would expect $0 in damages. Should you pay into insurance, or should you take the risk and buy no car insurance at all? Draw a decision tree and show your work to support your claim. (25 points) EXTRA CREDIT: Why do engineers sometimes use decision trees? (2 points) 1. You buy a machine that costs fifty thousand dollars but makes you fifteen grand every year. You sell it after five years for twenty thousand dollars. Determine the missing information in the table below, show your work for each calculation you make, and label your calculations according to the letters. Tax Rate = 30%. (50 points) YR. 0 1 2 3 4 STRAIGHT LINE MODIFIED ACCELERATED COST RECOVERY SUM OF THE YEARS DOUBLE DECLINING SYSTEM B.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. D. B.V. T.I. TAX A.T.C.F. -$50k $50k $50k $50k -$50k $50k $50k $50k $50k +$15k $6k $44k $9k $2.7k F G $40K $5k $1.5k $13.5k L $30k N o P $10k $40k $5k $ $1.5k $13.5k +$15k B $38k $9k $2.7k $12.3k $8k H $7k $2.13 $12.9 M$20k $5k $1.5k $13.5k $16k $24k $1k $0.3k $15.3k +$15k $6k C $9k $2.7k $12.3k $6k $26k $9k $2.7k $12.3k $20k $15k $4.5k $10.5k $9.6k $14.4k $5.4k $ $1.62k $13.38k +$15k $6k $26k D $2.7k $12.3k $4k $22k 1 J $11.7k $20k $15k $4.5k $10.5k $5.76k $8.64 $9.24k $2.772k $12.228k A $6k $20k $29k E $26.3k $2K $20k $33k $9.9k K $20K $35k $10.5k $24.5k 0 R $26.36k $7.908k $27.092k $0 - - - $20k - S T U 5 "6" EXTRA CREDIT: What is the most commonly used depreciation schedule in the business world? (1 point) 2. Your Dad likes to brag about how he made fifty thousand dollars annually as an engineer in 1970. You hope you can "one-up" him with your offer letter right out of college in 2015 that promises you seventy thousand dollars annually. Can you? Why or why not? (25 points) EXTRA CREDIT: Describe a scenario in which you should ask for a raise. What equations and other information would you use to justify this to your boss? (3 points) 3. You are considering purchasing car insurance that costs $800. You don't want to be a "chump" if you don't have to be. You do some research, and you find out that there's only a 3% chance that you will get in a serious accident costing $500 in damages with insurance, but $13,000 without insurance. The potential for a small accident costing $300 in damages with or without insurance is 7%. The other 90% of the time, it is not probable you would wreck, and thus you would expect $0 in damages. Should you pay into insurance, or should you take the risk and buy no car insurance at all? Draw a decision tree and show your work to support your claim. (25 points) EXTRA CREDIT: Why do engineers sometimes use decision trees? (2 points)