Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset depreciation range (ADR). Carefully refer to Table 1211 to determine in what depreciation category the asset falls. (Hint: It is not 10 years.) The asset will cost $110,000, and it will produce earnings before depreciation and taxes of $34,000 per year for three years, and then $15,000 a year for seven more years. The firm has a tax rate of 25 percent. Assume the cost of capital is 12 percent. In doing your analysis, if you have years in which there is no depreciation, merely enter a zero for depreciation. Use Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Calculate the net present value. (Do not round intermediate calculations and round your answer to 2 decimal places.) Net Present Value: Year Cost MACRS Rate as per schedule Depreciation ($) 1 110,000 0.143 15,730 2 110,000 0.245 26,950 3 110,000 0.175 19,250 4 110,000 0.125 13,750 5 110,000 0.089 9,790 6 110,000 0.089 9,790 7 110,000 0.089 9,790 8 110,000 0.045 4,950 9 110,000 0 10 110,000 0 Total 110,000

I used the steps mentioned in your course and I received 6533.83, This answer happens to incorrect. Would you please verify the steps I did and resolve the issue?

Amount in $ 1 34,000 0 4 5 6 7 8 2 3 34,000 34,000 9 15,000 10! 15,000 15,000 15,000 15,000 15,000 15,000 Particulars Year Earnings before depreciation and taxes Less Depreciation Earning before Tax Less 25% Tax Earning after Tax (Net Income) 0 OI 15,730 18,270 4567.5 26,950 19,250 7,050 14,750 1762.5 3687.5 13,750 1,250 312.5 9,790 5,210 1302.5 9,790 5,210 1302.5 9,790 5,210 1302.5 4,950 10,050 2512.5 15,000 3750 15,000 3750 13,703 5,288 11,063 938 3,908 3,908 3,908 7,538 11,250 11,250 3,908 9790 7,538 4,950 11,250 0 11,250 01 Cash Flow Earning after Tax (Net Income) Add Depreciation Initial Investment Net Cash Flow PV Factor at 12% PV of Cash Flow 13,703 5,288 11,063 938 3,908 3,908 15,730 26,950 19,250 13,750 9,790 9,790 -110,000 -110,000 29,433 32,238 30,313 14,688 13,698 13,698 1 0.893 0.797 0.712 0.636 0.567 0.5071 -110000 26283.67 25693.69| 21582.9 9341.57| 7766.766 6944.886 13,698 12,488 0.452 0.404 6191.5 5045.15 11,250 0.361 4061.25 11,250 0.322 3622.5i