Problem
Assume the equipment in Problem 15.44 is fi- nuanced with a 13% loan that will be repaid with five equal annual payments. Determine the EAW in year-0 dollars of the product. How different is this from the value in Problem 15.44?
Problem 44
(Refer to Problem 13.34.) We-Clean-U, Inc., expects to receive $42,000 each year for 15 years from the sale of its newest soap, On Guard. There will be an initial investment in new equipment of $150,000. The expenses of manufacturing and selling the soap will be $17,500 per year. Expenses and receipts have no differential inflation beyond the CPI of 7%. Using MACRS depreciation, a marginal tax rate of 42%, and an interest rate of 12%, determines the EAW in year-0 dollars of the product. How different is this from the -$1512 that was calculated by ignoring inflation?
Problem 34
We-Clean-U, Inc., expects to receive $42,000 each year for 15 years from the sale of its newest soap, On Guard. There will be an initial investment in new equipment of $150,000. The expenses of manufacturing and selling the soap will be $17,500 per year. Using MACRS depreciation, a marginal tax rate of 42%, and an interest rate of 12%, determine the EAW of the product.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.