Question: please fill out table and determine present worth The CFO of Acme Manufacturing is considering the purchase of a special diamond-tipped cutting tool. This tool

The CFO of Acme Manufacturing is considering the purchase of a special diamond-tipped cutting tool. This tool has the following initial costs to put into service Acme will use cash to pay for all of these expenses, some of which was borrowed on a long-term credit line with the local bank. The CFO has been directed by Acme to use the MACRS depreciation method with a GDS recovery penod of 5 years Assume the tool is sold in the fifth year for $20,000 Is this a good investment? Click the icon to view the additional data on the revenues, expenses, and interest rates Click the icon to view the GDS Recovery Rates (x) Click the icon to view the interest and annuity table for discrete compounding when the MARRE 10% per year - Complete the blank cells in the table below (Round to the nearest dollar) Taxable income 3 ATCFS BTCFS Income Tax (24%), EOY Depreciation, 0 4,080 1 26.800 96.432 2 -4,781 90.000 90,000 90.000 90 000 90,000 20,000 3 10 4 16,554 6 68,976 D 0 5 Purchase price Delivery charge Installation cost Employee training $320,000 $6,000 $29,000 $10,000 e Increased annual revenue Increased annual expenses After-tax MARR Effective tax rate Sales price of the tool in yr. 5 Projected salvage value in yr 5 $120,000 $30,000 10% 24% $20,000 $10,000
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
