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# Question 10-8

Capital Rate=

14%
Year

Truck

Pulley

0
1
2
3
4
5

\$ (17,100.00)
\$ 5,100.00
\$ 5,100.00
\$ 5,100.00
\$ 5,100.00
\$ 5,100.00

\$ (22,430.00)
\$ 7,500.00
\$ 7,500.00
\$ 7,500.00
\$ 7,500.00
\$ 7,500.00

IRR=
NPV=
MIRR=
Accept=

14.99%
\$408.71
14.54%

20.00%
\$3,318.11
17.19%

YES

Data
Cost=
Capital Rate=
Life= (Years)
Year
0
1
2
3
4
5
6

YES

Accept both since the IRR and
MIRR are both greater the
Capital rate of 14%

NPV=
IRR=

00 \$ 6.00 \$ \$ \$ \$ \$ 5.00 2.057.000.00 5.290.Question 10-9 Electric Powered \$ 17.00 6.00 2.860.290.000.00 \$ 600.000.00 5.97% \$ \$ \$ \$ \$ 6.00) \$ 5.00 \$ 2.290.000.600.000.00 40% ???? \$ (17.000.00% Since the IRR are almost identical.290.500.04 17.00 \$ 22.000.000.000.000.00 \$3.000.00 .000.00 \$3. But the NPV for the Electricc is higher I would choose the Electric Equations 2-8 and 2-9 page 64 Net Profit= Tax deduction Total Profit Operating Cash Flow= \$ 1.000.000.000.00 5.00) \$ (22.00 12% 12% 6 6 Gas Powered Question 11-2 Projected Sales Operating Cost Depreciation Interest Expense Tax Rate 1st Year Cash Flow= \$ \$ \$ \$ 10.75 18.000.00 \$ 400.500.000.00 6.000.00 5.000.000.290.00 6. we caneliminate that choice.000.290.00 7.00 6.

000.000.00 Example layed on on Page 433 .600.00 Sales-OC-Depr Por*40% Salvage Value= \$ 20.00 80% \$ 5.000.000.000.00 Profit of sale= Tax of gain \$ 1.00 \$ 400.000.000.00 Salvage Value \$ 4.000.000.Question 11-3 Original Cost Rate of Dper Selling Price Tax Rate \$ 2.000.600.00 40% ????? Value of Depr= at 80% \$ 4.000.