MS303_Excel_Solutions_Ekders

MS303_Excel_Solutions_Ekders - 7.36 Capital investment...

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7.36 Plastic Copper Capital investment $10,000 $15,000 Useful life (years) 5 10 $5,000 $10,000 Annual expenses $500 $200 $0 $0 Income-tax rate (t) 40% After-tax MARR 10% Alternative A: Plastic (A) (B) (C)=(A)-(B) (D)=-t(C) (E)=(A)+(D) AW (10%) EOY BTCF Depr. TI T (40%) ATCF 0 -$10,000 -- -- -- -$10,000 -$2,638 1 - 5 -$500 $1,000 -$1,500 $600 $100 $100 5 $0 -- -$5,000 $2,000 $2,000 $328 -$2,210 Minimize Cost: Select Alternative B (A) (B) (C)=(A)-(B) (D)=-t(C) (E)=(A)+(D) AW (10%) EOY BTCF Depr. TI T (40%) ATCF 0 -$15,000 -- -- -- -$15,000 -$2,441 1 - 10 -$200 $500 -$700 $280 $80 $80 10 $0 -- -$10,000 $4,000 $4,000 $251 -$2,110 Salvage value at the end of useful life Market value at the end of useful life Alternative B : Copper
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7.58 (a) Capital investment $10,000,000 (SL depreciation) Market Value $0 Annual Savings $4,000,000 Useful Life 4 Income-tax rate (t) 40% After-tax MARR 15% EOY BTCF Depr. TI T (40%) ATCF 0 -$10,000,000 -- -- -- -$10,000,000 1 $4,000,000 $2,500,000 $1,500,000 -$600,000 $3,400,000 2 $4,000,000 $2,500,000
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This note was uploaded on 03/17/2012 for the course MS 303 taught by Professor T during the Spring '12 term at Sabancı University.

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MS303_Excel_Solutions_Ekders - 7.36 Capital investment...

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