Project Part $($B$)$

As an enginner in RedOak company, your department head asked you to perform an analysis of installing MAP$/$TOP in the manufacturing planning devision of your company.

$($MAP$/$TOP is a communications integration software system developed by Boeing$).$ The entire system would be implemented and operated by one of two consultant groups: $Hi$

Tone or Extra$-$S$.$ The first cost $($includes MAP$/$TOP software, hardware, implementation and training costs$)$ that your company will agree to pay is still in question. The possible

variation of the initial cost estimate $P$ is included in the consultants' proposals below. $(100\%$ of P means use the whole amount of estimated P$).$

The first cost of $Hi-$Tone is $105\%$ of its $P$ and the first cost of Extra$-$S is $100\%$ of its $P.$ Both system are depreciated based on $5-$year MACRS. Hi$-$Tone is sold

$51$ points

for $$130,000$ in year $4.$ Put in table the cash flow for both alternatives from year $0$ to year $6,$ Including CFBT$,$ depreciation, depreciation recapture, taxable

income, taxes, and ATCF using effective tax rate $Te=38\%.$ The After tax MARR for your company is $8\%.$

a$-$ Find the after tax present worth for both alternatives by hand $($i$.$e$.$ write down the equation of calculating PW of ATCF$).$

$|$Answer:

b$-$ Find the PW of ATCF for both alternative using NPV function, select the better alternative.

Answer:

$2$ points

c$-$ Use IRR function to find the after tax ROR of each alternative.

Answer:

d$-$ Use ROR analysis for ATCF to selet the suitable alternative.

Answer:Project Part $($B$)$

As an enginner in RedOak company, your department head asked you to perform an analysis of installing MAP$/$TOP in the manufacturing planning devision of your company.

$($MAP$/$TOP is a communications integration software system developed by Boeing$).$ The entire system would be implemented and operated by one of two consultant groups: $Hi$

Tone or Extra$-$S$.$ The first cost $($includes MAP$/$TOP software, hardware, implementation and training costs$)$ that your company will agree to pay is still in question. The possible

variation of the initial cost estimate $P$ is included in the consultants' proposals below. $(100\%$ of P means use the whole amount of estimated P$).$

The first cost of $Hi-$Tone is $105\%$ of its $P$ and the first cost of Extra$-$S is $100\%$ of its $P.$ Both system are depreciated based on $5-$year MACRS. Hi$-$Tone is sold

$51$ points

for $$130,000$ in year $4.$ Put in table the cash flow for both alternatives from year $0$ to year $6,$ Including CFBT$,$ depreciation, depreciation recapture, taxable

income, taxes, and ATCF using effective tax rate $Te=38\%.$ The After tax MARR for your company is $8\%.$

a$-$ Find the after tax present worth for both alternatives by hand $($i$.$e$.$ write down the equation of calculating PW of ATCF$).$

$|$Answer:

b$-$ Find the PW of ATCF for both alternative using NPV function, select the better alternative.

Answer:

$2$ points

c$-$ Use IRR function to find the after tax ROR of each alternative.

Answer:

d$-$ Use ROR analysis for ATCF to selet the suitable alternative.

Answer: