Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. amt, inc., is considering the purchase of a digita

AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications by...

50.1K

Verified Solution

Question

Finance

AMT, Inc., is considering the purchase of a digital camera formaintenance of design specifications by feeding digital picturesdirectly into an engineering workstation where computer-aideddesign files can be superimposed over the digital pictures.Differences between the two images can be noted, and corrections,as appropriate, can then be made by design engineers. (7.12)

a. You have been asked by management to determine the PW of theEVA of this equipment, assuming the following estimates: capitalinvestment = $345,000; market value at end of year six = $120,000;annual revenues = $120,000; annual expenses = $8,000; equipmentlife = 6 years; effective income tax rate = 50%; and after-tax MARR= 10% per year. MACRS depreciation will be used with a five-yearrecovery
period.

b. Compute the PW of the equipment’s ATCFs. Is your answer inPart (a) the same as your answer
in Part (b)

Answer & Explanation Solved by verified expert
3.7 Ratings (494 Votes)
5MACRS depreciation schedule Year n Cost C Depreciation rate r Depreciation Cr Book value BV 0 345000 1 20 69000 276000 2 32 110400 165600 3 1920 66240 99360 4 1152 39744 59616 5 1152 39744 19872 6 576 19872 0 a EVA NOPAT in Year n aftertax MARR Book value at the beginning of Year n NOPAT Taxable income Income tax Formula Year end n 0 1 2 3 4 5 6 6 Capital outflow    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Which of the following is true for a 5-year project with a 3-year payback period? The net...

Finance
Q

1. In a bomb calorimeter, reactions are carried out a. at 1 atm pressure and 25

Chemistry
Q

Find two diseases that affect mitochondrial function. For each disease (a) Discuss the pathophysiology of the...

Medical Sciences
Q

Determine the size of a square footing at the ground level to transmit a load of...

Civil Engineering
Q

There is a circle with a smaller circle inside of it. What's the electric field for...

Physics
Q

If six oranges cost $5.20, what wouldbe the price of one orange?(Round to the nearest...

Basic Math
Q

Find the value of z in the solution of the following system:2x+2y+3z = -1073x +...

Basic Math
Q

10 Find the area inside r 1 sin 0

Calculus
Q

Gilpatric Corporation produces and sells two products. In the most recent month, Product Q71M had...

Accounting
Q

The numbers are good two of the account names are not good Cheyenne...

Accounting
Q

In one approach to identifying the classes in a problem, the programmer identifies the ______________...

Accounting
Q

File: Westchester The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Currently,...

Accounting