For problem 5.2, please use the ROI table format similar to the text; with depreciation, Taxes and after-tax cash flow. Start with an initial ROI (2%), and then go to the next higher value (3%). You have to pro-rate the ROI % to get the correct answer.

5.2. A company is considering buying a plastic injection mold tool and has two options: a twocavity mold at $45,000 or a four-cavity mold at $80,000. It is expected that each mold will last 100,000 shots and will have to be replaced at no book value. The company is expected to sell 40,000 parts/year at $0.25 profit per piece. Use ROI analysis techniques to determine which mold the company should buy, assuming a tax rate of 33 percent straight-line depreciation for the life of the machine. Do not include a replacement for the two-cavity machine after five years. Use hand calculations (no software) for ROI determination