Craig Industries has an opportunity to expand one of its production facilities at a cost of $275,000. If the expansion is undertaken Craig Industries expect their income will increase y $60,000 for year 1 and then increase by $5,000 each year through year 10. The annual operating cost is expected to be $10,000 the first year and increase by $1000/year thereafter. The company will depreciate the equipment using a 7 year MACRS (0.1429, 0.2449, 0.1749, 0.1249, 0.0893, 0.0892,0.0893, 0.0446) The expected market value at the end of 10 years is $75,000 and the tax rate is 34%.
What is the IRR or the BTCF?
What is the present worth of the after tax cash flow if MARR is 15%?
What is the tax on the depreciation recapture?
Please show how to do it in excel!
This was the only thing given on the question.