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Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber...

Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber is to be used for rigorous reliability testing and burn-in. It is installed for $1,400,000 and will have a salvage value of $200,000 after 8 years. Its use will create an opportunity to increase sales by $650,000 per year and will have operating expenses of $250,000 per year. All dollar amounts are expressed in real dollars. Depreciation follows MACRS 5-year property, taxes are 25%, the real after-tax MARR is 10%, and inflation is 4.2%.

  1. Determine the actual after-tax cash flows for each year.
    ATCF0 = $enter a dollar amount
    ATCF1 = $enter a dollar amount
    ATCF2 = $enter a dollar amount
    ATCF3 = $enter a dollar amount
    ATCF4 = $enter a dollar amount
    ATCF5 = $enter a dollar amount
    ATCF6 = $enter a dollar amount
    ATCF7 = $enter a dollar amount
    ATCF8 = $enter a dollar amount
  2. Determine the PW of the after-tax cash flows.
    PW$T = $enter a dollar amount
  3. Determine the AW of the after-tax cash flows.
    AW$T = $enter a dollar amount
  4. Determine the FW of the after-tax cash flows.
    FW$T = $enter a dollar amount
  5. Determine the combined IRR of the after-tax cash flows.
    IRRc = enter percentages %
  6. Determine the combined ERR of the after-tax cash flows.
    ERRc = enter percentages %
  7. Determine the real IRR of the after-tax cash flows.
    IRRr = enter percentages %
  8. Determine the real ERR of the after-tax cash flows.
    ERRr = enter percentages %

Parts a-d: Round your answer to 2 decimal places. The tolerance is ± 5.
Parts e-h: Round your answer to 2 decimal places and present in percentage format. The tolerance is ± 0.1.

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jeff jeffy answered 2 years ago
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