Question: Course is Engineering Economics Please solve this example below Example: You are considering buying an industrial equipment whose price is $ 540000 . The equipment

Course is Engineering Economics

Please solve this example below

Example: You are considering buying an industrial equipment whose price is $ 540000 . The equipment is expected to earn an annual revenue of $200,000. The equipment will be depreciated under MACRS as a five-year recovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Your companys marginal tax rate is 35% over the project period. Perform the following:

a) Determine the net after-tax cash flows for each period over the project life.

b) Net present worth assuming company MARR = 15%.

c) Annual equivalent cash flow company MARR = 15%.

d) IRR of the project.

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