Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber is to be used for rigorous reliability testing and
Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber is to be used for rigorous reliability testing and burnin. It is installed for $800,000, $400,000 of which is borrowed at 11% for 5 years, and will have a salvage value of $175,000 after 8 years. Its use will create an opportunity to increase sales by $650,000 per year and will have operating expenses of $250,000 per year. Corporate income taxes are 25%. Develop tables using a spreadsheet to determine the ATCF for each year and the aftertax PW, AW, IRR, and ERR. ifthe chamber is kept for 8 yea rs. Aftertax MARR is 10%. Determine for each year the ATCF and the PW, FW, AW, IRR, and ERR for the investment if: Click here to access theTVM Factor Table Calculator Click here to access the MACRSGDS table. Part a straightline depreciation is used over 8 years with no halfyear convention and the loan is paid back using Method 1 {interest only at the end of each year ofthe loan, plus principal at the end ofthe last year}. End of Year ATCF 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ ? $ 8 $ PW: $ FW: 3': AW: 55 For dollar amounts. carry all Interim calculations to 5 decimal places and then round your nai answer to the nearest dollar. The tolerance is :50. IRR: 96 ERR: 96
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started