Quiz6_Spring09 - 1 . 1 000 . 9 9 1 _ .,---_ .----_ .-----?...

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CHEE 5369 / 6369 Quiz # 6 (Cl o sed book) ~ Tuesday March 3, 2009 \ I t . Biotech, a medical imaging and modeling company, must purcha ~ tJ e cell analysis system for use by a team of bi o engineers and mechanical engineers studying bon e den s ity in athletes. Thi s particula r part of a 3 - year c o ntra c t w i th the NBA w i ll provide a gross income of $100,000 per y ear . The effective ta x rate is 35% . The following information is given : First cost = $150,000 Operating expenses = $ 3 0,000 per year MACRS recovery = 5 years The unit will be sold after 3 years at a price of $130,000 s \ ": . . \ ') 0 I 0 0 D (MACRS depre c ia t ion r a tes for n = 5 are 2 0% , 32%,19.2 % ,11.52 % ,11.5 2% , and 5. 7 6 % for years 1 to 6, respectively) Usin g an after tax MARR of 10% as the appropriate i nterest rate, caiculate the present worth (PW) and the annual worth (AW) of CFAT for the 3 - year co n tract. - - - ~ -'- .- -- -- - -- - 10 % tA BLE 15 D is c rete C as h Flow: C omp o un d I nterest Factors 10 % I Single P aym e nts Un ifor m S er i es P a ym en t s Arithm e t i c Gr a dient s F / P P / F A / F F / A A j P P I A P I G A / G I . Co mp ou nd Pres en t Si n ki ng Compound C ap it a l Pr e s e nt G ra di e nt G r a di e n t n A m o unt Wo r t h F u nd Amo u nt R eco v e r y W o rth Pr ese nt Worth Unifo rm S e r i es J I . 1 00 0 0.90 0 1 1 . 000 0 0 1 . l~) O ( )
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This note was uploaded on 04/13/2011 for the course CHEE 5369 taught by Professor Alim during the Spring '11 term at University of Houston.

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