A construction company is considering acquiring a new earthmover. The purchase price is $112,000, and an...

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A construction company is considering acquiring a new earthmover. The purchase price is $112,000, and an additional $26,000 is required to modify the equipment for special use by the company. The equipment falls into the MACRS seven-year classification (the tax life), and it will be sold after five years (the project life) for $50,000. The purchase of the earthmover will have no effect on revenues, but the machine is expected to save the firm $72,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 30%. Assume that the initial investment is to be financed by a bank loan at an interest rate of 9% payable annually. Determine the after-tax cash flows by using the generalized cash flow approach and the worth of the investment for this project if the firm's MARR is known to be 8%. Fill in the table below. (Round to the nearest dollar.) Period Net After-Tax Cash Flow 1 2 $ $ $ Single Payment Compound Amount Factor (F/P, i, N) Present Worth Factor (P/F, i, N) Compound Amount Factor (F/A, i, N) Equal Payment Series Sinking Fund Factor (A/F, i, N) Present Worth Factor (P/A, I, N) Capital Recovery Factor (A/P, I, N) N12345 67 1.0800 0.9259 1.0000 1.0000 0.9259 1.0800 1.1664 0.8573 2.0800 0.4808 1.7833 0.5608 1.2597 0.7938 3.2464 0.3080 2.5771 0.3880 1.3605 0.7350 4.5061 0.2219 3.3121 0.3019 1.4693 0.6806 5.8666 0.1705 3.9927 0.2505 1.5869 0.6302 7.3359 0.1363 4.6229 0.2163 1.7138 0.5835 8.9228 0.1121 5.2064 0.1921 N12345 67 Single Payment Equal Payment Series Compound Present Compound Sinking Present Amount Factor (F/P, i, N) 1.0900 Worth Factor (P/F, i, N) 0.9174 Amount Factor (F/A, i, N) Fund Worth Factor Factor (A/F, i, N) (P/A, I, N) Capital Recovery Factor (A/P, I, N) 1.0000 1.0000 0.9174 1.0900 1.1881 0.8417 2.0900 0.4785 1.7591 0.5685 1.2950 0.7722 3.2781 0.3051 2.5313 0.3951 1.4116 0.7084 4.5731 0.2187 3.2397 0.3087 1.5386 0.6499 5.9847 0.1671. 3.8897 0.2571 1.6771 0.5963 7.5233 0.1329 4.4859 1.8280 0.5470 9.2004 0.1087 5.0330 0.2229 0.1987 Year n Class Depreciation 10 15 20 200% rate 200% 200% 200% 150% 150% 1 33.33 20.00 14.29 10.00 5.00 44.45 32.00 24.49 18.00 9.50 3.750 7.219 3 14.81 19.20 17.49 14.40 8.55 6.677 7.41 11.52 12.49 11.52 7.70 6.177 11.52 8.93 9.22 6.93 5.713 6 7 8 9 10 11 12 13 14 15 16 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 6.56 5.91 4.462 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 5.91 4.462 5.90 4.461 5.91 4.462 295 4 461 A construction company is considering acquiring a new earthmover. The purchase price is $112,000, and an additional $26,000 is required to modify the equipment for special use by the company. The equipment falls into the MACRS seven-year classification (the tax life), and it will be sold after five years (the project life) for $50,000. The purchase of the earthmover will have no effect on revenues, but the machine is expected to save the firm $72,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 30%. Assume that the initial investment is to be financed by a bank loan at an interest rate of 9% payable annually. Determine the after-tax cash flows by using the generalized cash flow approach and the worth of the investment for this project if the firm's MARR is known to be 8%. Fill in the table below. (Round to the nearest dollar.) Period Net After-Tax Cash Flow 1 2 $ $ $ Single Payment Compound Amount Factor (F/P, i, N) Present Worth Factor (P/F, i, N) Compound Amount Factor (F/A, i, N) Equal Payment Series Sinking Fund Factor (A/F, i, N) Present Worth Factor (P/A, I, N) Capital Recovery Factor (A/P, I, N) N12345 67 1.0800 0.9259 1.0000 1.0000 0.9259 1.0800 1.1664 0.8573 2.0800 0.4808 1.7833 0.5608 1.2597 0.7938 3.2464 0.3080 2.5771 0.3880 1.3605 0.7350 4.5061 0.2219 3.3121 0.3019 1.4693 0.6806 5.8666 0.1705 3.9927 0.2505 1.5869 0.6302 7.3359 0.1363 4.6229 0.2163 1.7138 0.5835 8.9228 0.1121 5.2064 0.1921 N12345 67 Single Payment Equal Payment Series Compound Present Compound Sinking Present Amount Factor (F/P, i, N) 1.0900 Worth Factor (P/F, i, N) 0.9174 Amount Factor (F/A, i, N) Fund Worth Factor Factor (A/F, i, N) (P/A, I, N) Capital Recovery Factor (A/P, I, N) 1.0000 1.0000 0.9174 1.0900 1.1881 0.8417 2.0900 0.4785 1.7591 0.5685 1.2950 0.7722 3.2781 0.3051 2.5313 0.3951 1.4116 0.7084 4.5731 0.2187 3.2397 0.3087 1.5386 0.6499 5.9847 0.1671. 3.8897 0.2571 1.6771 0.5963 7.5233 0.1329 4.4859 1.8280 0.5470 9.2004 0.1087 5.0330 0.2229 0.1987 Year n Class Depreciation 10 15 20 200% rate 200% 200% 200% 150% 150% 1 33.33 20.00 14.29 10.00 5.00 44.45 32.00 24.49 18.00 9.50 3.750 7.219 3 14.81 19.20 17.49 14.40 8.55 6.677 7.41 11.52 12.49 11.52 7.70 6.177 11.52 8.93 9.22 6.93 5.713 6 7 8 9 10 11 12 13 14 15 16 5.76 8.92 7.37 6.23 5.285 8.93 6.55 5.90 4.888 4.46 6.55 5.90 4.522 6.56 5.91 4.462 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 5.91 4.462 5.90 4.461 5.91 4.462 295 4 461

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Here are the calculations for the requested table Purchase Price 112000 Modification Cost 26... View the full answer