Question: USE EXCEL TO SOLVE IT PLEASE 4w(25 points 5, (25 points Metallic Peripherals, Inc. has received a production contract for a new product. The contract

USE EXCEL TO SOLVE IT PLEASE

USE EXCEL TO SOLVE IT PLEASE 4w(25 points 5, (25 points Metallic

4w(25 points 5, (25 points Metallic Peripherals, Inc. has received a production contract for a new product. The contract lasts for 5 years. To do the necessary machining operations, the firm can use its own CNC mill, which was purchased 4 years ago at a cost of $450,000. Today the CNC mill can be sold for $58,000. In 5 years the CNC will have a $15,000 salvage value. Annual O&M costs for the CNC are $20,000/year, increasing by 10% per year thereafter. If the firm uses its own CNC mill it must also purchase an additional one at a cost of $200,000, its value in 5 years will be $30,000. The new lathe O&M costs are year. Increasing with a gradient series of $500 per year. As an alternative, the presently owned CNC mill can be traded in for $65,000 and a new CNC mill of larger capacity purchased for a cost of $550,000, its value in 5 years is estimated to be $550,000(080L, and its annual O&M costs $6,000/year increasing by 10% per year thereafter. All the CNC mills are MACRS-GDS 7-year property class, the company has a 40% tax rate, and uses a 10% MARR. Clearly show the ATCF profile for each alternative a0 Using an EUAC comparison, a planning horizon of 5 years, and the insider cash flow approach, decide which is the more favorable alternative. b0 Using an EUAC, the insider approach, and assuming that Section 1031 like-kind property exchange is used, determine the more favorable alternative

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

\f