Homework 9
11
A Total First CosAnnual Benefits Recovery Period Salvage Value $ 14,000.00 $ 2,500.00 5 $ 5,000.00 Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes 0 $ (14,000.00) 1 $ 2,500.00 $ 2,333.10 $ 166.90 2 $ 2,500.00 $ 5,185.94 $ (2,685.94) 3 $ 2,500.00 $ 959.83 $ 1,540.17 4 $ 2,500.00 $ - $ 2,500.00 5 $ 2,500.00 $ - $ 2,500.00 Salvage $ 4,000.49 After Tax ROR 1.39% B Total First CosAnnual Benefits Recovery Period Salvage Value $ 18,000.00 $ 1,000.00 5 $ 10,000.00 Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes 0 $ (18,000.00) 1 $ 1,000.00 $ 2,333.10 $ (1,333.10) 2 $ 1,000.00 $ 5,185.94 $ (4,185.94) 3 $ 1,000.00 $ 959.83 $ 40.17 4 $ 1,000.00 $ - $ 1,000.00 5 $ 1,000.00 $ - $ 1,000.00 Salvage $ 7,098.60 After Tax ROR -6.13% C Total First CosAnnual Benefits Recovery Period Salvage Value $ 10,000.00 $ 5,000.00 5 $ - Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes 0 $ (10,000.00) 1 $ 5,000.00 $ 1,666.50 $ 3,333.50 2 $ 5,000.00 $ 3,704.24 $ 1,295.76 3 $ 5,000.00 $ 685.59 $ 4,314.41 4 $ 5,000.00 $ - $ 5,000.00 5 $ 5,000.00 $ - $ 5,000.00 Salvage $ 3,943.67 After Tax ROR 26.14% CHOOSE ALTERNATIVE C
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Homework 9 project management
Transcript of Homework 9
ATotal First Costs Annual Benefits Recovery Period Salvage Value Tax Rate $ 14,000.00 $ 2,500.00 5 $ 5,000.00 45%Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes at 45%
0 $ (14,000.00)1 $ 2,500.00 $ 2,333.10 $ 166.90 $ 75.11 2 $ 2,500.00 $ 5,185.94 $ (2,685.94) $ (1,208.67)3 $ 2,500.00 $ 959.83 $ 1,540.17 $ 693.08 4 $ 2,500.00 $ - $ 2,500.00 $ 1,125.00 5 $ 2,500.00 $ - $ 2,500.00 $ 1,125.00
Salvage $ 4,000.49 After Tax ROR 1.39%
BTotal First Costs Annual Benefits Recovery Period Salvage Value Tax Rate $ 18,000.00 $ 1,000.00 5 $ 10,000.00 45%Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes at 45%
0 $ (18,000.00)1 $ 1,000.00 $ 2,333.10 $ (1,333.10) $ (599.90)2 $ 1,000.00 $ 5,185.94 $ (4,185.94) $ (1,883.67)3 $ 1,000.00 $ 959.83 $ 40.17 $ 18.08 4 $ 1,000.00 $ - $ 1,000.00 $ 450.00 5 $ 1,000.00 $ - $ 1,000.00 $ 450.00
Salvage $ 7,098.60 After Tax ROR -6.13%
CTotal First Costs Annual Benefits Recovery Period Salvage Value Tax Rate $ 10,000.00 $ 5,000.00 5 $ - 45%Period Before Tax Cash Flows MACRS Depreciation Taxable Incomes at 45%
0 $ (10,000.00)1 $ 5,000.00 $ 1,666.50 $ 3,333.50 $ 1,500.08 2 $ 5,000.00 $ 3,704.24 $ 1,295.76 $ 583.09 3 $ 5,000.00 $ 685.59 $ 4,314.41 $ 1,941.48 4 $ 5,000.00 $ - $ 5,000.00 $ 2,250.00 5 $ 5,000.00 $ - $ 5,000.00 $ 2,250.00
Salvage $ 3,943.67 After Tax ROR 26.14% CHOOSE ALTERNATIVE C
After-Tax Cash Flow $ (14,000.00) $ 2,424.90 $ 3,708.67 $ 1,806.92 $ 1,375.00 $ 1,375.00
After-Tax Cash Flow $ (18,000.00) $ 1,599.90 $ 2,883.67 $ 981.92 $ 550.00 $ 550.00
After-Tax Cash Flow $ (10,000.00) $ 3,499.93 $ 4,416.91 $ 3,058.52 $ 2,750.00 $ 2,750.00
Year Loss in Market value Interest O&M cost Total marginal 1 3000 1800 2700 75002 2000 1440 2900 63403 2000 1200 3300 65004 2000 960 3700 66605 2000 720 4200 69206 2000 480 4700 7180
Do it after the 6th year
Year Salvage Value EUAC Maintnence Cost O&M cost EUAC installed Costs Total EUAC0 10000 0 0 01 3000 300 300 8500 88002 3500 300 300 4523 48233 4000 300 300 3228 35284 4500 360 600 2602 29625 5000 485 1200 2242 27276 5500 703 2400 2014 27177 6000 1074 4800 1862 2936
Year Market Value Loss in MV Interest (15%) Year(n)* Productivity Costs $ - $ 12,000.00 $ - $ 1.00 $ 9,000.00 $ 3,000.00 $ 1,350.00 $ - $ 10,350.00 $ 2.00 $ 7,000.00 $ 2,000.00 $ 1,050.00 $ 1,000.00 $ 9,050.00 $ 3.00 $ 5,000.00 $ 2,000.00 $ 750.00 $ 2,000.00 $ 7,750.00 $ 4.00 $ 3,000.00 $ 2,000.00 $ 450.00 $ 3,000.00 $ 6,250.00
Keep for 2 years
Year O&M PW (A/G,15%,n)+50001 5000 4464.29 61202 6000 4783.46 54723 7000 4982.46 59254 8000 5084.14 63595 9000 5106.84 6775
Monthly Salvage Loan Payoff Net CommissionsFirst Option $ 988.35 $ 210,000.00 $ 110,000.00 $ 16,800.00 Second Option $ 960.00 $ 320,000.00 $ 10,000.00 $ 32,000.00
NPW = C - A(P/A,I,n)+CMStep 1 NPW $ 188,975.26 Step 2 NPW $ (50,797.76)
Sonar MachineYear SOYD Book Value Before Tax Cash Flows SOYD
1 $ 3,200.00 $ 14,800.00 2 $ 2,800.00 $ 12,000.00 3 $ 2,400.00 $ 9,600.00 4 $ 2,000.00 $ 7,600.00 5 $ 1,600.00 $ 6,000.00 $ (7,000.00)6 $ 1,200.00 $ 4,800.00 $ 1,200.00 7 $ 800.00 $ 4,000.00 $ 800.00 8 $ 400.00 $ 3,600.00 $ 1,600.00 $ 400.00
SHSS MachineYear Before Tax Cash Flows MACRS Depreciation Taxable Income at 40%
0 $ (10,000.00)1 $ 500.00 $ 1,000.00 $ (500.00) $ (200.00)2 $ 500.00 $ 3,200.00 $ (2,700.00) $ (1,080.00)3 $ 500.00 $ 1,920.00 $ (1,420.00) $ (568.00)
$ 4,000.00 $ (165.00) $ (66.00)
Year ATCF-SHSS ATCF-Sonar Net Difference0 $ (10,000.00) $ (6,600.00) $ (3,400.00)5 $ 700.00 $ 480.00 $ 220.00 6 $ 1,580.00 $ 320.00 $ 1,260.00 7 $ 5,080.00 $ 2,560.00 $ 2,520.00
Taxable Income at 40% After Tax Cash Flow
$ 1,000.00 $ 400.00 $ (6,600.00) $ (1,200.00) $ 480.00 $ 480.00 $ (800.00) $ 320.00 $ 320.00 $ (400.00) $ 160.00 $ 2,560.00 $ 2,000.00 $ 800.00
After-Tax Cash Flows $ (10,000.00) $ 700.00 $ 1,580.00 $ 1,068.00 $ 4,066.00
