An injection molding machine can be purchased and installed for $90,000. It is in the seven- year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i. e., revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000. An effective income tax rate of 40% is used by the company, and the after-tax MARR equals 15% per year. (30 points)

a) What is the approximate value of the company’s before-tax MARR?

b) Determine the GDS depreciation amounts in years one through eight.

c) What is the taxable income at the end of year eight that is related to capital investment?

d) Set up a table and calculate the ATCF for this machine.

e) Should a recommendation be made to purchase the machine?

Lipman auto parts, a family-owned auto parts store, began january with $10,300.00 in cash. management forecasts that collections from credit customers will be $11,400.00 in january and $14,800.00 in february. the store is scheduled to receive $5,000.00 in cash on a business note receivable in january. projected cash payments include inventory purchases ($13,000.00 in january and $13,600.00 in february) and operating expenses ($2,700.00 each month). lipman auto parts' bank requires a $10,000.00 minimum balance in the store's checking account. at the end of any month when the account balance dips below $10,000.00, the bank automatically extends credit to the store in multiples of $1,000.00. lipman auto parts borrows as little as possible and pays back loans in quarterly installments of $2,000.00, plus 4 percent interest on the entire unpaid principal. the first payment occurs three months after the loan.