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Frank Smith Plumbing Project Data Needed for analysis: Year-1 Year-2 Cost of Capital (borrowing) 6.50% Cost of Truck $175,000 Cost of additional equiment attached to truck $15,000 Tax rate 35% Annual Before Tax & Depreciation Truck Projected Earnings $68,000 $74,000 Depreciation Percentage Rate (MACRS)* 20.0% 32.0% * The proposed truck has an estimated economic life of seven years but will be treated as a five-year MACRS property Calculate the following -- light yellow highlighted cells need to be co Year-0 Annual Before Tax & Depreciation Truck Projected Earnings Depreciation Expense Annual Before Tax Truck Projected Earnings Tax Annual Projected Truck Earnings 1 2 Depreciation to add back Projected Truck Net Cash Flow cumulative cash flow discounted cash flow cumulative discounted cash flow Decision Criteria: Pay Back Period Discounted Pay Back Period (DPB)** Net Present Value Internal Rate of Return Profitability Index Years Years Recommendations: mith Plumbing ded for analysis: Year-3 $78,000 Year-4 Year-5 $80,000 $84,000 Year-6 Year-7 Year-8 $83,000 $84,000 $85,000 19.2% 11.5% 11.5% 5.8% ed as a five-year MACRS property for depreciation purposes. 0.0% 0.0% ow highlighted cells need to be completed sion Criteria: mmendations: 3 4 5 6 7 8