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Unformatted text preview: challenger is 3,000 YTL per year. The analysis period is 5 years. The new machine will also work for 8 hrs per day and 250 days per year. The hourly wage for the workers of the new machine is 12 YTL. What is the maximum number of required workers that will justify purchasing the new machine? (Effective tax rate = 40%, after tax MARR=10%) End of year 0 cash flow for the existing asset. This is for the case of keeping the existing asset. EOY BTCF Depreciation TI Tax ATCF-55000 --------------5000 2000 53000 (If we sold the existing asset now, we would have to pay tax for a gain of 5000 since MV=55000 and BV=50000, in the amount of 5000*0.4=2000. When we keep the existing asset, we do not have to pay this 2000 so it appears as a positive cash flow and increases the ATCF)...
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- Fall '12