Question: Show all work do not use excel to solve A corporation with $7 million in annual taxable income is considering two alternatives: IGNORE the taxable
A corporation with $7 million in annual taxable income is considering two alternatives: IGNORE the taxable income. Before-Tax Cash Flow ($1000) Year 0 1-10 11-20 Alt. 1 -$10,000 Alt. 2 DON'T IGNORE -$20,000 4,500 4,500 4.500 IGNORE depreciation but DON'T IGNORE the fact Both alternatives will be depreciated by straight-line depreciation assuming a 10-year depre- ciable life and is to be replaced at the end of its useful life. If the corporation has a minimum attractive rate of return of 10% after taxes. it choose? Solve the problem by: that salvage = 0, or that neither alternative will be replaced at the end of its useful life. You are asked to solve this problem using MARR no salvage value. Neither alternative -10%before taxes using each of the methods identified. which alternative should (a) Present worth analysis (b) Annual cash flow analysis (c) Rate of return analysis (d) Future worth analysis (e) Benefit-cost ratio analysis how all steps to manual Complete the following table with answers only. On another sheet of paper, s Alternative 2 Increment Alternative 2-1 Alternative 1 a) b) c) P= A= IRR = d) F= B-C = e) Which Alternative do you select? Explain why you made your selection
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