A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 40%, and MACRS-GDS depreciation is used. If the desired after-tax return on investment is 10% per year,

Design A: Capital investment: $1,400,000

MV at end of useful life: $977,500

Annual revenues less expenses: $380,000

MACRS property class (years): 5 useful life (years): 7

Design B: Capital investment: $2,400,000

MV at end of useful life: $977,500

Annual revenues less expenses: $540,000

MACRS property class (years): 5 useful life (years): 6

1) What is the AW of the ATCF of Design A

2) What is the AW of the ATCF of Design B

3) For the design that should be chosen if repeatability assumption applies, please write the AW of the ATCF of the selected Design here.

4) What is the EVA of Design B in year 4?