The Greentree Lumber Company is attempting to evaluate the profitability of adding another cutting line to its present sawmill operations. They would need to purchase two more acres of land for $25,000 (total). The equipment would cost $ 138,000 and could be depreciated over a five-year recovery period with the MACRS method. Gross revenue is expected to be $50,000 per year for five years, and operating expenses will be $13,000 annually for five years. It is expected that this cutting line will be closed down after five years. The firm's effective income tax rate is 51%. If the company's after-tax MARR is 8% per year, is this a profitable investment? Assume that land recovered at original cost of $25,000 at the end of five years. The market value of equipment is negligible at the end of year 5. Click the icon to view the GDS Recovery Rates (tk) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Calculate the PW value for this investment. PW (8%) = (Round to the nearest dollar.) GDS Recovery Rates (r) Year 5-year Property Class 1 0.2000 2 0.3200 3 0.1920 4 0.1152 5 0.1152 6 0.0576 Capital Recovery Factor To Find A Given P AIP N 1 Discrete Compounding; i = 8% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A Given P Given F Given A Given A Given F FIP PIF FIA PIA AIF 1.0800 0.9259 1.0000 0.9259 1.0000 1.1664 0.8573 2.0800 1.7833 0.4808 1.2597 0.7938 3.2464 2.5771 0.3080 1.3605 0.7350 4.5061 3.3121 0.2219 1.4693 0.6806 5.8666 3.9927 0.1705 1.5869 0.6302 7.3359 4.6229 0.1363 1.7138 0.5835 8.9228 5.2064 0.1121 1.8509 0.5403 10.6366 5.7466 0.0940 1.9990 0.5002 12.4876 6.2469 0.0801 2.1589 0.4632 14.4866 6.7101 0.0690 2 3 4 5 1.0800 0.5608 0.3880 0.3019 0.2505 0.2163 0.1921 0.1740 0.1601 0.1490 6 7 8 9 10