Universal Electronics is considering the purchase of manufacturing equipment with a

$1$

$0$

$-$

year midpoint in its asset depreciation range

$($

ADR

$)$

$.$

$$Carefully refer to Table

$1$

$2$

$$

$1$

$1$

$$to determine in what depreciation category the asset falls.

$($

Hint: It is not

$1$

$0$

$$years$.$

$)$

$$The asset will cost $

$1$

$4$

$0$

$,$

$0$

$0$

$0$

$,$

$$and it will produce earnings before depreciation and taxes of $

$4$

$5$

$,$

$0$

$0$

$0$

$$per year for three years, and then $

$2$

$3$

$,$

$0$

$0$

$0$

$$a year for seven more years. The firm has a tax rate of

$2$

$5$

$$percent$.$ Assume the cost of capital is

$1$

$4$

$$percent$.$ In doing your analysis, if you have years in which there is no depreciation, merely enter a zero for depreciation. Use Table

$1$

$2$

$$

$1$

$2$

$.$

$$Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Calculate the net present value.

$*$

$*$

$*$

$$I DO NOT HAVE A FINANCIAL CALCULATOR

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$*$

$*$