Week 5. Chapters 11, 12, & 13 i Saved Help Save & Exit Submit Check my work 9 DataPoint Engineering is considering the purchase of a new piece of equipment for $300,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $120,000 in nondepreciable working capital. $50,000 of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table 12-11, Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. 1 points Year 1 3 3 4 5 6 Amount $203,000 172,000 142,000 127,000 101,000 91,000 eBook Hint The tax rate is 25 percent. The cost of capital must be computed based on the following: Print Debt Preferred stock Common equity (retained earnings) Kd Ke Cost (aftertax) 7.30% 11.40 16.00 Weights 40% 10 50 References a. Determine the annual depreciation schedule. (Do not round intermediate calculations. Round your depreciation base and annual depreciation answers to the nearest whole dollar. Round your percentage depreciation answers to 3 decimal places.) Year Depreciation Base Percentage Depreciation Annual Depreciation 1 2 3 4 5 6 Mc Graw Hill EUCATION Check my work 9 1 points b. Determine the annual cash flow for each year. Be sure to include the recovered working capital in Year 6. (Do not round intermediate calculations and round your answers to 2 decimal places.) eBook Year Cash Flow 1 DO Hint 2 3 4 Print 5 6 References c. Determine the weighted average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) % Weighted average cost of capital 9 of 10 Next >