ass12_due111808_sol

ass12_due111808_sol - ISE460 Fall 2006 Example 10.6...

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ISE460 Fall 2006 Example 10.6 Multiple Assets 10/01/2009 Page 1 No.1 Initial Cost $55,000 MACRS 5 Tax Rate = 30% MARR = 10% Inflatrion rate 5% Year 0 1 2 3 4 5 6 Income Statement Revenues $30,000 $35,000 $55,000 $70,000 $70,000 $60,000 Expenses Rental $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 O&M $15,000 $21,000 $25,000 $30,000 $30,000 $30,000 Depreciation $11,000 $17,600 $10,560 $6,336 $6,336 $1,584 Taxable Income $(5,600) $(13,200) $9,840 $24,064 $24,064 $18,816 Income Taxes $(1,680) $(3,960) $2,952 $7,219 $7,219 $5,645 Net Income $(3,920) $(9,240) $6,888 $16,845 $16,845 $13,171 Cash Flow Statement Operating Activities Net Income $(3,920) $(9,240) $6,888 $16,845 $16,845 $13,171 Depreciation $11,000 $17,600 $10,560 $6,336 $6,336 $1,584 Investrment ($55,000) Salvage $13,401 Gains Tax ($3,545) Net Cash Flow ($55,000) $7,080 $8,360 $17,448 $23,181 $23,181 $24,611 Net Cash Flow (actual) ($55,000) $6,743 $7,583 $15,072 $19,071 $18,163 $18,365 Net Present Value $15,573 IRR on actual dollar 11.74% Book Value $44,000 $26,400 $15,840 $9,504 $3,168 $1,584 A B C D E F G H 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
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No.2 First Year Rate 5% Second Year Rate 8% Combined rate 13% Average rate 6.49%
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No.3 Initial Cost $212,000 MACRS 5 Tax Rate = 40% MARR = 20% Inflatrion rate 0% Year 0 1 2 3 4 Income Statement Revenues $349,000 $349,000 $349,000 $349,000 Expenses Resin $140,000 $140,000 $140,000 $140,000 O&M $36,000 $36,000 $36,000 $36,000 Software $20,000 Depreciation $42,400 $67,840 $40,704 $24,422 Taxable Income $110,600 $105,160 $132,296 $148,578 Income Taxes $44,240 $42,064 $52,918 $59,431 Net Income $66,360 $63,096 $79,378 $89,147 Cash Flow Statement Operating Activities Net Income $66,360 $63,096 $79,378 $89,147 Depreciation $42,400 $67,840 $40,704 $24,422 Investrment ($212,000) Salvage Gains Tax Net Cash Flow
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