The Balas Manufacturing Company is considering buying an overhead pulley system. The new system has a purchase price of $150,000 and it costs $35,000 to install. An estimated annual savings of $95,000 for the six-year project life and MACRS class life of five years are considered. The estimated salvage value is $10,000. The system is expected to enable the company to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective products made. A total annual operating and maintenance of $40,000 will be realized if the new pulley system is installed. Assuming a marginal tax rate of 40% and MARR of 10% answer the following using the provided XLS template. Fill in all shaded cells, and include notes as required to clarify your solution and document assumptions.

Finance the purchase price over the project life - annual payments & compounding, 6% interest. Operating costs increase due to inflation at 2% per year beginning in year 2.

1. Depreciation Schedule

2. Ammortization Table

3. income statement

4. cash Flow statement

5. npv @10%

6 sensitivity analysis

7. stochastic costs