Henredon can spend \($190,000\) now, similar to the investment in problem 25, for a design portfolio with a different furniture look inspired by some of the ultramodern culture in the metropolitan areas of Dubai. While some consider this a gamble, it is generally conceded that such a new line can result in increased net revenues of \($45,000\) per year for 11 years, plus \($50,000\) in the twelfth year. Henredon’s marginal tax rate is 40 percent, and MARR is 10 percent on the after-tax cash flows.

a. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR after 12 years.

b. Compare the results of Part a with those of Problem 25b, where MACRS-GDS is used. Explain the differences.