Graph the irr for financing percentages ranging

Reference no: EM132168048

Question: The simulator in Problem will save $600,000 per year in experimental costs.

a) What is the after-tax IRR?

b) What is the after-tax IRR if the loan in Problem is used to buy the equipment?

c) Graph the IRR for financing percentages ranging from 0% to 90%.

Problem: The R&D lab of Big Tech Manufacturing will purchase a $1.8M process simulator. It will be replaced at the end of year 5 by a newer model. Use MACRS and a tax rate of 40%. The simulator's salvage value is $.5M.

a) What is the ATCF due to the simulator in year 5?

b) What is the equipment's after-tax EAC over the 5 years if the interest rate is 10%?

Reference no: EM132168048

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