Question
Raytronics wishes to use an automated environmental chamber in the manufacture of elec- tronic components. The chamber is to be used for rigorous reliability testing
Raytronics wishes to use an automated environmental chamber in the manufacture of elec- tronic components. The chamber is to be used for rigorous reliability testing and burn-in. It is installed for $1.4 million and will have a salvage value of $200,000 after 5 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-tax rate is 25% and after-tax MARR is 8%. Determine the present worth of the after-tax cash flow using MACRS-GDS 3-year property with the Section 179 expense deduction.
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