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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 burn-in. It is installed for $1,360,000 and will have a salvage value of $180,000 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. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 5-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 3.6%.

  1. Determine the actual after-tax cash flows for each year. ATCF0 = $enter a dollar amount ATCF1 = $enter a dollar amount ATCF2 = $enter a dollar amount ATCF3 = $enter a dollar amount ATCF4 = $enter a dollar amount ATCF5 = $enter a dollar amount ATCF6 = $enter a dollar amount ATCF7 = $enter a dollar amount ATCF8 = $enter a dollar amount
  2. Determine the PW of the after-tax cash flows. PW$T = $enter a dollar amount
  3. Determine the AW of the after-tax cash flows. AW$T = $enter a dollar amount
  4. Determine the FW of the after-tax cash flows. FW$T = $enter a dollar amount
  5. Determine the combined IRR of the after-tax cash flows. IRRc = enter percentages %
  6. Determine the combined ERR of the after-tax cash flows. ERRc = enter percentages %
  7. Determine the real IRR of the after-tax cash flows. IRRr = enter percentages %
  8. Determine the real ERR of the after-tax cash flows. ERRr = enter percentages %

It would be appreciated if it was done on Excel but it's okay if it isn't.

image text in transcribed

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 burn-in. It is installed for $1.360.000 and will have a selvage value of $180,000 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. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 5-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 3.6%. a. Determine the actual after-tax cash flows for each year. ATCFo= $ ATCF1 = $ ATCF2 = $ ATCF, = $ ATCF= $ ATCF5= $ ATCF = $ ATCF7 = $ ATCF9 = $ b. Determine the PW of the after-tax cash flows. PWST = $ c Determine the AW of the after-tax cash flows. AWST = $ d. Determine the FW of the after-tax cash flows. FWST = $ e. Determine the combined IRR of the after-tax cash flows. IRR = % f. Determine the combined ERR of the after-tax cash flows. ERR = % 3. Determine the real IRR of the after-tax cash flows. IRR, h. Determine the real ERR of the after-tax cash flows. ERR = 96 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 burn-in. It is installed for $1.360.000 and will have a selvage value of $180,000 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. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 5-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 3.6%. a. Determine the actual after-tax cash flows for each year. ATCFo= $ ATCF1 = $ ATCF2 = $ ATCF, = $ ATCF= $ ATCF5= $ ATCF = $ ATCF7 = $ ATCF9 = $ b. Determine the PW of the after-tax cash flows. PWST = $ c Determine the AW of the after-tax cash flows. AWST = $ d. Determine the FW of the after-tax cash flows. FWST = $ e. Determine the combined IRR of the after-tax cash flows. IRR = % f. Determine the combined ERR of the after-tax cash flows. ERR = % 3. Determine the real IRR of the after-tax cash flows. IRR, h. Determine the real ERR of the after-tax cash flows. ERR = 96

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