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14. (4 pts) A special power tool for plastic products costs $400, has a four-year useful life, no salvage value, and uniform

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Answer #1

Refer the attached table for calculation of CFAT

Year 0 | 1 2 CFBT -$400 $200 $200 $200 $200 Depr. rate Depre($). TI Tax | CFAT - - -$400.00 0.3333 $133.32 $66.68 $14.00 $186

Depreciation charges 1st year= $ 400 × 0.3333 = $ 133.32

2nd year = $ 400 × 0.4445 = $ 177.80

Like wise we can determine for all the years.

Taxable income (TI) = CFBT - Depreciation

Tax = Taxable Income × 0.21

CFAT = CFBT - Tax

Calculating the present worth

\large PW = -400 + \frac{186}{1.1} + \frac{195.34}{1.1^2} +\frac{170.44}{1.1^3}+ \frac{164.22}{1.1^4}

\large PW = -400 + 169.09+ 161.44+128.05+ 112.17

\large PW = \$ \ 170.75

Please contact if having any query will be oblige foto you for your generous support. Your help mean a lot to me, please help. Thank you.

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