A tractor for over-the-road hauling is to be purchased by AgriGrow for $85,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,100. Transportation cost savings are expected to be $160,000 per year; however, the cost of drivers is expected to be $61,000 per year, and operating expenses are expected to be $53,000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $6,100. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR after only 4 years. Click here to access the TVM Factor Table Calculator Part a Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ $ $ $

A tractor for over-the-road hauling is to be purchased by AgriGrow for $85,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,100. Transportation cost savings are expected to be $160,000 per year; however, the cost of drivers is expected to be $61,000 per year, and operating expenses are expected to be $53,000 per year, including fuel, maintenance, insurance, and the like. The company's marginal tax rate is 25 percent, and MARR is 10 percent on after-tax cash flows. Suppose that, to AgriGrow's surprise, they actually dispose of the tractor at the end of the fourth tax year for $6,100. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR after only 4 years. Click here to access the TVM Factor Table Calculator Part a Use straight-line depreciation (no half-year convention). End of Year ATCF 0 1 2 3 4 $ $ $ $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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