We-Clean-U, Inc., expects to receive $65,000 each year for 5 years from the sale of its newest soap, OnGuard. 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. Straight-Line Depreciation is to be used with $5,000 Salvage Value. Annual income tax rate is at 30%. a. Compute the ATCF for the 5-year period using the tabular method (Show YEAR, BTCF, DEPRECIATION, TAXABLE INCOME, INCOME TAX, ATCF). b. If the MARR for We-Clean-U is 12%, is OnGuard a worthwhile investment?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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can you please show me the right solution
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can you please show me the right solution
can you please show me the right solution
can you please show me the right solution

We-Clean-U, Inc., expects to receive $65,000 each year for 5 years from the
sale of its newest soap, OnGuard. 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. Straight-Line Depreciation is to be used with $5,000
Salvage Value. Annual income tax rate is at 30%.
a. Compute the ATCF for the 5-year period using the tabular method (Show YEAR,
BTCF, DEPRECIATION, TAXABLE INCOME, INCOME TAX, ATCF).
b. If the MARR for We-Clean-U is 12%, is OnGuard a worthwhile investment?
Transcribed Image Text:We-Clean-U, Inc., expects to receive $65,000 each year for 5 years from the sale of its newest soap, OnGuard. 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. Straight-Line Depreciation is to be used with $5,000 Salvage Value. Annual income tax rate is at 30%. a. Compute the ATCF for the 5-year period using the tabular method (Show YEAR, BTCF, DEPRECIATION, TAXABLE INCOME, INCOME TAX, ATCF). b. If the MARR for We-Clean-U is 12%, is OnGuard a worthwhile investment?
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