•   TALON, Inc. is evaluating a proposed acquisition for a laser cutter. The laser cutter costs

• $$150,000$ and requires another $$12,000$ in freight, setup, and calibrations. The laser cutter has an

• expected service life of $5$ years but falls into the MACRS $7-$year class for depreciation purposes. After $5$

• years the salvage value is estimated at $$55,000.$ With the laser cutter online annual revenues are

• estimated at $$175,000.$ Annual expenses are estimated at $$90,000.$ The CEO has authorized $$35,000$ in

• working capital which is to be recovered at the end of the $5$th year. The CFO has set the firm$$s MARR at

• $17\%($after tax$)$ and the tax rate for the firm is set at $40\%.$ Solve the following:

• $($b$)$ calculate the yearly taxes

• $($c$)$ Identify any gain or loss from the salvage of the asset at the end of the $5$th year; calculate any

• additional taxes for the $5$th year $($if required$).$

• $($d$)$ draw the ATCF diagram $($make clear the various cashflows$)$

• $($e$)$ find the PW$(17\%)$ and state your decision to invest or not.