A manufacturer of suction pool skimmers is analyzing an inve…

A manufacturer of suction pool skimmers is analyzing an investment project to reduce order delivery time. The general inflation rate over the life of the project is expected to be [fbar]%. The manufacturer’s market interest rate is [mir]%. What is the inflation-free interest rate that should be used in the analysis? (Answer as a percentage, to two decimal places.)

A cherry processing facility in Northern Michigan processes…

A cherry processing facility in Northern Michigan processes both sweet and tart cherries for local growers. The facility needs to install a new cherry pitter. An analyst recently obtained the following estimates. Preliminary feasibility study (this year, year 0) $6,000 Purchase & install system (this year, year 0) $260,000 Annual operating costs (years 1-8) $16,000 in year 1, increasing by $3,000 each year Salvage value (year 8) $26,000 Other phase-out activities (year 8) $4,500 The cherry pitter would be used for eight years. The facility uses a before-tax MARR of 10% per year for these types of decisions. (Round to nearest dollar.) What is the capital recovery (CR) cost of the system? $[cr] What is the annual equivalent worth of the operating costs? $[aoc] What is the annual equivalent cost of this project? $[aec]

A company is considering an investment with the following ex…

A company is considering an investment with the following expected cash flows, in constant dollars. Year NCF, Constant Dollars 0 −[inv],000 1 [y1],000 2 [y1],000 3 [y1],000 The general inflation rate ( f ) during this project period is expected to be [fbar]%. The company’s inflation-free interest rate is [ip]%. What is the equivalent present worth of this project at Year 0? (Round to nearest dollar.)

In order to expand tele-health services, a provider must inv…

In order to expand tele-health services, a provider must invest in technology for video and audio calls. The cost for the new equipment is $1,900,000. The equipment would be depreciated as a 5-year property using the MACRS method. Gross income from this investment is expected to be $750,000 in year 1 and increase by $30,000 each year. Annual operating expenses are expected to be $150,000 in year 1 and increase by $20,000 each year. The provider’s combined marginal tax rate is 39%. The provider uses a study period of 6 years for these purchases and plans to keep the equipment indefinitely. What is the cash flow after taxes for Year 4?    $[ca2] (round to nearest dollar) Refer to the CFAT summary below. Use the CFAT that you calculated in (a) for Year 4. What is the after-tax Rate of Return over the study period?    [ror]% (round percentage to one decimal) If their MARR is 14%, should the provider invest in this equipment, YES or NO?    [in]   Year CFAT,$ 0 −1,900,000 1 514,200 2 609,220 3 520,472 4 (a) CFAT 5 475,763 6 439,182  

In order to expand tele-health services, a provider must inv…

In order to expand tele-health services, a provider must invest in technology for video and audio calls. The cost for the new equipment is $1,900,000. The equipment would be depreciated as a 5-year property using the MACRS method. Gross income from this investment is expected to be $750,000 in year 1 and increase by $30,000 each year. Annual operating expenses are expected to be $150,000 in year 1 and increase by $20,000 each year. The provider’s combined marginal tax rate is 39%. The provider uses a study period of 6 years for these purchases and plans to keep the equipment indefinitely. What is the cash flow after taxes for Year 2?    $[ca2] (round to nearest dollar) Refer to the CFAT summary below. Use the CFAT that you calculated in (a) for Year 2. What is the after-tax Rate of Return over the study period?    [ror]% (round percentage to one decimal) If their MARR is 14%, should the provider invest in this equipment, YES or NO?    [in]   Year CFAT,$ 0 −1,900,000 1 514,200 2 (a) CFAT 3 520,472 4 469,663 5 475,763 6 439,182