Question: NAME: SHOW ALL WORK Problem 2 (50pts) Congratulations, you recently inherited a farm, and decided to purchase a new road-safe tractor unit tox $98,000! You
NAME: SHOW ALL WORK Problem 2 (50pts) Congratulations, you recently inherited a farm, and decided to purchase a new road-safe tractor unit tox $98,000! You plan on keeping the tractor unit for the next six years, at which time you will sell it for its salvage value of $8,000. Over these six years, you expect annual revenues due to the new tractor to be $20,000 per year. Assuming a tax rate of 40% and a MARR of 6%, Calculate the annual depreciation and book value of the tractor, for each of the six years, using the following methods: a) i. SL (assume nonMACRS SL method) ii. DB (200%) iii. GDS b) Using the GDS depreciation calculated in part a), convert your annual BTCFs to ATCFs. c) Using the ATCFs calculated in part b), calculate the PW of this purchase. s this a good investment
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