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4.7 Find the equivalent present worth of the following 6-year project using the depreciation schedule...

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4.7 Find the equivalent present worth of the following 6-year project using the depreciation schedule in Table 4-6 (MACRS percentages for 3-, 5-, and 7-year property); purchase and installation cost, $100,000; maintenance per year, $10,000; energy saving per year, $45,000; salvage value, $20,000. Assume that the minimum attrac- tive rate of return is 12% /year. Assume that the corporate tax rate is 34%, and that the equipment has a 5-year life for tax purposes. What is the after-tax ROR or IRR for this project? Table 4-6. MACRS Percentages for 3-, 5-, and 7-year Property Year 3-year 1 33.33% 44.45% 3 14.81% 4 7.41% 5 N 5-year 20% 32% 19.2% 11.52% 11.52% 5.76% 7-year 14.29% 24.49% 17.49% 12.49% 4 6 8.93% 8.92% 8.93% 4.46% 7 8

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