Time 6 years Base Cash flow Salvage $50,000 $15,000 $20,000 Question 2. (18 points) You are planning to buy office furniture for a temporary branch of your company. This branch will be open for 5 years, and after that it will come back to the headquarters. It is not feasible to relocate the furniture, so you will sell it for its market value at the end of these five years. The purchase price of the furniture is $50,000. It'll contribute to the profits in the amount of $15,000 per year. Its salvage value is estimated as $20,000 when sold at the end of its useful life. MARR=4%. Use S/L, 150% DB, and MACRS methods to compute dk and BVk values. For this, fill out the yellow cells below with your calculated results (each cell must contain a formula). Hint: Determine the useful life is for this asset first. 0.3 With S/L: With DB: With MACRS: t BVk t MACRS rate dk BV 1 2 dk | BVk $50,000 $15,000 $35,000 $10,500 $24,500 $7,350 $17,150 $5,145 $12,005 $3,602 $8,404 $20,000 5 Time 6 years Base Cash flow Salvage $50,000 $15,000 $20,000 Question 2. (18 points) You are planning to buy office furniture for a temporary branch of your company. This branch will be open for 5 years, and after that it will come back to the headquarters. It is not feasible to relocate the furniture, so you will sell it for its market value at the end of these five years. The purchase price of the furniture is $50,000. It'll contribute to the profits in the amount of $15,000 per year. Its salvage value is estimated as $20,000 when sold at the end of its useful life. MARR=4%. Use S/L, 150% DB, and MACRS methods to compute dk and BVk values. For this, fill out the yellow cells below with your calculated results (each cell must contain a formula). Hint: Determine the useful life is for this asset first. 0.3 With S/L: With DB: With MACRS: t BVk t MACRS rate dk BV 1 2 dk | BVk $50,000 $15,000 $35,000 $10,500 $24,500 $7,350 $17,150 $5,145 $12,005 $3,602 $8,404 $20,000 5