Do not use excel please. Show equations used. Notes: Every MARR is given as an effective annual rate unless stated otherwise. Show each rate ofreturn as a percentage with 2 decimal places such as 6.37%. You may round off all PW, AW, or FWvalues to the nearest dollar. In 2013, you spent $55,000 for new equipment plus $5,000 to install it, which is added to the costbasis. Each year for four years, you earned $50,000 by using this equipment before subtracting $30,000in expenses. Use the GDS depreciation factors shown below and a tax rate of 28%.GDS (MACRS) depreciation factors from Table 7-3 for a 3-year recovery periodYear: -2014201520160.0741Factor =0.44450.148120130.3333a.What depreciation was claimed on this equipment for the year 2015?b. What was the remaining book value of that equipment after the 2015 depreciation was taken?C. What was the after-tax cash flow (ATCF) obtained in 2015 from the use and depreciation of thisequipment?d. If the equipment was sold in 2016 for $10,000 before any more depreciation was taken, what wasthe capital gain or loss reported on this equipment in that year?

Initial cost=Equipment cost +installation cost Equipment cost=$55000 Installation cost=$5000 Initial…

Answered: In 2013, you spent $55,000 for new…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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