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EAC - Burnout Batteries Initial Cost = $36 each 3-year life...

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Burnout Batteries Long-lasti Initial Cost = $36 each Initial Cos 3-year life 5-year life $100 per year to keep charged $88 per y Expected salvage = $5 Expected Straight-line depreciation Straight-li Income Statement Income S year 0 1 2 3 year Revenue 0 0 0 Revenue Costs 100 100 100 Costs Depreciation 10.33 10.33 10.33 Depreciat Taxes -37.51 -37.51 -37.51 Taxes OCF -62.49 -62.49 -62.49 OCF year 0 1 2 3 year OCF -62.49 -62.49 -62.49 OCF chang(NWC) 0 0 0 0 chang(NW NCS -36 0 0 5 NCS salvage 5 salvage tax on salvage 0 tax on s after-tax salvage 5 after-ta CFFA -36 -62.49 -62.49 -57.49 CFFA PV(CFFA) -36 -54.34 -47.25 -37.8 PV(CFFA NPV -175.38 NPV NPV ($175.38) (using the Excel formula) NPV EAC ($52.32) EAC
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ting Batteries tax rate 0.34 st = $60 each discount rate 0.15 e year to keep charged d salvage = $5 ine depreciation Statement 0 1 2 3 4 5 0 0 0 0 0 88 88 88 88 88 tion 11 11 11 11 11 -33.66 -33.66 -33.66 -33.66 -33.66 -54.34 -54.34 -54.34 -54.34 -54.34 0 1 2 3 4 5 -54.34 -54.34 -54.34 -54.34 -54.34 0 0 0 0 0 0 -60 0 0 0 0 5 e 5 salvage 0 ax salvage 5 -60 -54.34 -54.34 -54.34 -54.34 -49.34 -60 -47.25 -41.09 -35.73 -31.07 -24.53 -239.67 ($239.67) (using the Excel formula)
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