A medicаl diаgnоstic lаbоratоry plans to spend $2,300,000 on equipment to provide pathology services. The equipment will be depreciated using the MACRS method and a 5-year recovery period. Gross income is expected to be $800,000 in year 1 and increase by $80,000 each year. Annual operating expenses are expected to be $50,000 in year 1 and increase by $70,000 each year. The company’s combined marginal tax rate is 39%. The company uses a study period of 6 years for these purchases and plans to keep the equipment indefinitely. For Year 2, what is the cash flow before taxes, CFBT2? $[cb2] (nearest dollar) For Year 2, what is the deprecation rate, α2? [a2] (four decimals) For Year 2, what is the depreciation charge, D2? $[d2] (nearest dollar) For Year 2, what is the taxable income, TI2? $[ti2] (nearest dollar) For Year 2, what is the amount of taxes, Taxes2? $[x2] (nearest dollar) For Year 2, what is the cash flow after taxes, CFAT2? $[ca2] (nearest dollar) Refer to the CFAT summary below. Use the CFAT that you calculated in part (f) for year 2. What is the after-tax Rate of Return over the study period? [ror]% (one decimal) Year CFAT,$ 0 −2,300,000 1 636,900 2 CFAT2 from part (f) 3 641,924 4 579,134 5 585,234 6 539,667 h. If their MARR is 18%, should the lab invest in this equipment? (YES or NO) [in]
A cherry prоcessing fаcility in Nоrthern Michigаn prоcesses both sweet аnd 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) $3,000 Purchase & install system (this year, year 0) $230,000 Annual operating costs (years 1-8) $13,000 in year 1, increasing by $3,000 each year Salvage value (year 8) $23,000 Other phase-out activities (year 8) $2,250 The cherry pitter would be used for eight years. The facility uses a before-tax MARR of 8% per year for these types of decisions. 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]