PROBLEM 9.26
BASIS $1,350,000.00 BTCF $300,000.00 TAX RATE 40.00%
EST SALV $0.00 USE LIFE 12
MARRAT = 9.00%
RCVD SALV $900,000.00 PERIODS 4
a SLN
EOY BTCF DWO TI T ATCF
0 -$1,350,000.00 -$1,350,000.00
1 $300,000.00 $112,500.00 $187,500.00 $75,000.00 $225,000.00
2 $300,000.00 $112,500.00 $187,500.00 $75,000.00 $225,000.00
3 $300,000.00 $112,500.00 $187,500.00 $75,000.00 $225,000.00
4 $1,200,000.00 $112,500.00 $187,500.00 $75,000.00 $1,125,000.00
SUM DEPR
MARRAT = 9%
$450,000.00
PWAT = $16,519.66
FWAT = $23,318.85
$900,000.00
AWAT = $5,099.10
IRRAT = 9.42%
ERRAT = 9.33%
0 -$1,350,000.00 -$1,350,000.00
1 $300,000.00 $192,915.00 $107,085.00 $42,834.00 $257,166.00 14.29%
4 $1,200,000.00 $84,307.50 $609,645.00 $243,858.00 $956,142.00 6.245%
SUM DEPR
MARRAT = 9%
$843,952.50
PWAT = $38,021.09
BOOK VALUE
FWAT = $53,669.87
$506,047.50
AWAT = $11,735.92
IRRAT = 10.03%
ERRAT = 9.76%
0 -$1,350,000.00 -$1,350,000.00
1 $300,000.00 $225,000.00 $75,000.00 $30,000.00 $270,000.00
4 $1,200,000.00 $130,208.33 $418,750.00 $167,500.00 $1,032,500.00
SUM DEPR
MARRAT = 9%
$698,958.33
PWAT = $31,038.34
BOOK VALUE
FWAT = $43,813.16
$651,041.67
AWAT = $9,580.56
IRRAT = 9.83%
ERRAT = 9.62%
PROBLEM 9.27
BASIS $190,000.00 BTCF $45,000.00 TAX RATE 40.00%
EST SALV $5,000.00 USE LIFE 12
MARRAT = 10.00%
RCVD SALV $5,000.00 PERIODS 12
aSLN
EOY BTCF DWO TI T ATCF
0 -$190,000.00 -$190,000.00
1 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
4 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
5 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
6 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
9 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
10 $45,000.00 $15,416.67 $29,583.33 $11,833.33 $33,166.67
$185,000.00
PWAT = $37,580.60
BOOK VALUE
FWAT = $117,944.02
AWAT = $5,515.45
ERRAT = 11.67%
1 $45,000.00 $27,151.00 $17,849.00 $7,139.60 $37,860.40 14.29%
2 $45,000.00 $46,531.00 -$1,531.00 -$612.40 $45,612.40 24.49%
3 $45,000.00 $33,231.00 $11,769.00 $4,707.60 $40,292.40 17.49%
4 $45,000.00 $23,731.00 $21,269.00 $8,507.60 $36,492.40 12.49%
5 $45,000.00 $16,967.00 $28,033.00 $11,213.20 $33,786.80 8.93%
6 $45,000.00 $16,948.00 $28,052.00 $11,220.80 $33,779.20 8.92%
10 $45,000.00 $0.00 $45,000.00 $18,000.00 $27,000.00
11 $45,000.00 $0.00 $45,000.00 $18,000.00 $27,000.00
PWAT = $49,755.75
BOOK VALUE
FWAT = $156,154.86
$0.00
AWAT = $7,302.32
ERRAT = 12.15%
cDDB
EOY BTCF DWO TI T ATCF
0 -$190,000.00 -$190,000.00
1 $45,000.00 $31,666.67 $13,333.33 $5,333.33 $39,666.67
2 $45,000.00 $26,388.89 $18,611.11 $7,444.44 $37,555.56
3 $45,000.00 $21,990.74 $23,009.26 $9,203.70 $35,796.30
4 $45,000.00 $18,325.62 $26,674.38 $10,669.75 $34,330.25
5 $45,000.00 $15,271.35 $29,728.65 $11,891.46 $33,108.54
6 $45,000.00 $12,726.12 $32,273.88 $12,909.55 $32,090.45
7 $45,000.00 $10,605.10 $34,394.90 $13,757.96 $31,242.04
8 $45,000.00 $8,837.59 $36,162.41 $14,464.97 $30,535.03
9 $45,000.00 $7,364.65 $37,635.35 $15,054.14 $29,945.86
10 $45,000.00 $6,137.21 $38,862.79 $15,545.12 $29,454.88
11 $45,000.00 $5,114.34 $39,885.66 $15,954.26 $29,045.74
12 $50,000.00 $4,261.95 $24,428.28 $9,771.31 $40,228.69
SUM DEPR
MARRAT = 10%
$168,690.24
PWAT = $43,444.06
BOOK VALUE
FWAT = $136,346.08
$21,309.76
AWAT = $6,375.99
IRRAT = 14.70%
ERRAT = 11.90%
PROBLEM 9.28
COST $190,000.00 BTCF $45,000.00 TAX RATE 40.00%
MARRAT = 10.00%
BONUS@END $5,000.00 PERIODS 8
a EOY BTCF TI T ATCF
0 -$190,000.00 -$190,000.00 -$76,000.00 -$114,000.00
1$45,000.00 $45,000.00 $18,000.00 $27,000.00
2$45,000.00 $45,000.00 $18,000.00 $27,000.00
3$45,000.00 $45,000.00 $18,000.00 $27,000.00
4$45,000.00 $45,000.00 $18,000.00 $27,000.00
5$45,000.00 $45,000.00 $18,000.00 $27,000.00
6$45,000.00 $45,000.00 $18,000.00 $27,000.00
7$45,000.00 $45,000.00 $18,000.00 $27,000.00
8$45,000.00 $45,000.00 $18,000.00 $27,000.00
9$45,000.00 $45,000.00 $18,000.00 $27,000.00
10 $45,000.00 $45,000.00 $18,000.00 $27,000.00
11 $45,000.00 $45,000.00 $18,000.00 $27,000.00
12 $50,000.00 $50,000.00 $20,000.00 $30,000.00
MARRBT = 16.667% MARRAT = 10%
PWBT = $38,324.16 PWAT = $70,925.57
FWBT = $131,536.69 FWAT = $152,035.26
AWBT = $9,013.51 AWAT = $13,294.57
IRRBT = 21.44% IRRAT = 21.44%
ERRBT = 18.47% ERRAT = 14.53%
b BOTH INVESTMENTS ARE DESIRABLE. THE METRICS FOR THE
DESIGN PORTFOLIO ARE SUBSTANTIALLY BETTER,
DUE TO THE EXPENSING OF THE PORTFOLIO VS. DEPRECIATION
OF THE ROUTER OVER 8 YEARS.
PROBLEM 9.29
BASIS $90,000.00 BTCF $37,000.00 TAX RATE 40.00%
EST SALV $4,000.00 USE LIFE 6
MARRAT = 10.00%
RCVD SALV $6,000.00 PERIODS 4
SLN
EOY BTCF DWO TI T ATCF
2$37,000.00 $14,333.33 $22,666.67 $9,066.67 $27,933.33
3$37,000.00 $14,333.33 $22,666.67 $9,066.67 $27,933.33
4$43,000.00 $14,333.33 -$4,000.00 -$1,600.00 $44,600.00
SUM DEPR
MARRAT = 10%
$57,333.33
PWAT = $9,928.47
AWAT = $3,132.14
IRRAT = 14.63%
ERRAT = 12.92%
b MACRS(3)
EOY BTCF DWO TI T ATCF MACRS(3)
0 -$90,000.00 -$90,000.00
1$37,000.00 $29,997.00 $7,003.00 $2,801.20 $34,198.80 33.33%
2$37,000.00 $40,005.00 -$3,005.00 -$1,202.00 $38,202.00 44.45%
3$37,000.00 $13,329.00 $23,671.00 $9,468.40 $27,531.60 14.81%
4$43,000.00 $6,669.00 $36,331.00 $14,532.40 $28,467.60 7.41%
SUM DEPR
MARRAT = 10%
PWAT = $12,790.37
$0.00
AWAT = $4,034.99
IRRAT = 16.72%
ERRAT = 13.72%
cDDB
EOY BTCF DWO TI T ATCF
0 -$90,000.00 -$90,000.00
1$37,000.00 $30,000.00 $7,000.00 $2,800.00 $34,200.00
2$37,000.00 $20,000.00 $17,000.00 $6,800.00 $30,200.00
3$37,000.00 $13,333.33 $23,666.67 $9,466.67 $27,533.33
4$43,000.00 $8,888.89 $16,333.33 $6,533.33 $36,466.67
SUM DEPR
MARRAT = 10%
PWAT = $11,643.01
$17,777.78
AWAT = $3,673.03
IRRAT = 15.84%
PROBLEM 9.30
COST $90,000.00 BTCF $37,000.00 TAX RATE 40.00%
MARRAT = 10.00%
BONUS@END $6,000.00 PERIODS 4
a EOY BTCF TI T ATCF
0 -$90,000.00 -$90,000.00 -$36,000.00 -$54,000.00
1$37,000.00 $37,000.00 $14,800.00 $22,200.00
2$37,000.00 $37,000.00 $14,800.00 $22,200.00
3$37,000.00 $37,000.00 $14,800.00 $22,200.00
4$43,000.00 $43,000.00 $17,200.00 $25,800.00
MARRAT = 10%
PWAT = $18,829.86
FWAT = $27,568.80
AWAT = $5,940.27
IRRAT = 24.90%
ERRAT = 18.54%
b BOTH INVESTMENTS ARE DESIRABLE. THE METRICS FOR THE
100-DAY SHORT-TERM PROJECT ARE SUBSTANTIALLY BETTER,
DUE TO THE EXPENSING OF THE PROJECT VS. DEPRECIATION
OF THE TRACTOR OVER 4 YEARS.
PROBLEM 9.31
EOY END-OF-YEAR
BTCF BEFORE-TAX CASH FLOW
DWO DEPRECIATION WRITE-OFF (MACRS-GDS DEDUCTION)
TI TAXABLE INCOME
T TAX itr = 40%
ATCF AFTER-TAX CASH FLOW ATMARR = 10%
MACRS-GDS 5-YEAR PROPERTY CLASS
EOY BTCF DWO TI T ATCF MACRS(5)
0 -$125,000.00 -$125,000.00
1 $50,000.00 $25,000.00 $25,000.00 $10,000.00 $40,000.00 20.00
2 $60,000.00 $40,000.00 $20,000.00 $8,000.00 $52,000.00 32.00
3 $70,000.00 $24,000.00 $46,000.00 $18,400.00 $51,600.00 19.20
4 $80,000.00 $14,400.00 $65,600.00 $26,240.00 $53,760.00 11.52
5 $120,000.00 $7,200.00 $98,400.00 $39,360.00 $80,640.00 5.76 **
B5 = $14,400.00 PWAT = $79,896.59 =NPV(G8,G14:G18)+G13
AWAT = $21,076.52 =PMT(G8,5,-G22)
IRRAT = 30.213% =IRR(G13:G18)
ERRAT = 21.428% =MIRR(G13:G18,,G8)
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND
THE INTERNAL REVENUE SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION IN
THE YEAR OF DISPOSAL, THE DEPRECIATION DEDUCTION IN YEAR 5 IS ONE-HALF
WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE END OF 5 YEARS
IS EQUAL TO THE PRODUCT OF THE COST BASIS AND THE SUM OF ONE-HALF THE
MACRS PERCENTAGE FOR YEAR 5 AND ALL OF THE MACRS PERCENTAGE FOR YEAR
6: $125,000(0.0576+0.0576) = $14,400.
PROBLEM 9.32
EOY END-OF-YEAR
BTCF BEFORE-TAX CASH FLOW
DWO DEPRECIATION WRITE-OFF (MACRS-GDS DEDUCTION)
TI TAXABLE INCOME
T TAX itr = 40%
ATCF AFTER-TAX CASH FLOW ATMARR = 8%
MACRS-GDS 5-YEAR PROPERTY CLASS
EOY BTCF DWO TI T ATCF MACRS(5)
0 -$800,000.00 -$800,000.00
1 $100,000.00 $160,000.00 -$60,000.00 –$24,000.00 $124,000.00 20.00
2 $200,000.00 $256,000.00 -$56,000.00 –$22,400.00 $222,400.00 32.00
3 $300,000.00 $153,600.00 $146,400.00 $58,560.00 $241,440.00 19.20
4 $400,000.00 $92,160.00 $307,840.00 $123,136.00 $276,864.00 11.52
5 $700,000.00 $46,080.00 $561,760.00 $224,704.00 $475,296.00 5.76 **
B5 = $92,160.00 PWAT = $224,131.60 =NPV(G8,G14:G18)+G13
AWAT = $56,135.21 =PMT(G8,5,-G22)
IRRAT = 16.267% =IRR(G13:G18)
ERRAT = 13.469% =MIRR(G13:G18,,G8)
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND
THE INTERNAL REVENUE SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION IN
THE YEAR OF DISPOSAL, THE DEPRECIATION DEDUCTION IN YEAR 5 IS ONE-HALF
WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE END OF 5 YEARS
IS EQUAL TO THE PRODUCT OF THE COST BASIS AND THE SUM OF ONE-HALF THE
MACRS PERCENTAGE FOR YEAR 5 AND THE MACRS PERCENTAGE FOR YEAR 6:
$800,000(0.0576+0.0576) = $92,160.
PROBLEM 9.33
EOY END-OF-YEAR
BTCF BEFORE-TAX CASH FLOW
DWO DEPRECIATION WRITE-OFF (MACRS-GDS DEDUCTION)
TI TAXABLE INCOME
T TAX itr = 40%
ATCF AFTER-TAX CASH FLOW ATMARR = 8%
MACRS-GDS 3-YEAR PROPERTY CLASS
EOY BTCF DWO TI T ATCF MACRS(3)
0 -$800,000.00 -$800,000.00
1 $100,000.00 $266,640.00 -$166,640.00 -$66,656.00 $166,656.00 33.33
2 $200,000.00 $355,600.00 -$155,600.00 -$62,240.00 $262,240.00 44.45
3 $300,000.00 $118,480.00 $181,520.00 $72,608.00 $227,392.00 14.81
4 $400,000.00 $59,280.00 $340,720.00 $136,288.00 $263,712.00 7.41
5 $700,000.00 $0.00 $700,000.00 $280,000.00 $420,000.00 0.00
B5 = $0.00 PWAT = $239,331.88 =NPV(G8,G14:G18)+G13
AWAT = $59,942.21 =PMT(G8,5,-G22)
IRRAT = 17.395% =IRR(G13:G18)
ERRAT = 13.804% =MIRR(G13:G18,,G8)
PROBLEM 9.34
EOY END-OF-YEAR
BTCF BEFORE-TAX CASH FLOW
DWO DEPRECIATION WRITE-OFF (MACRS-GDS DEDUCTION)
TI TAXABLE INCOME
T TAX itr = 40%
ATCF AFTER-TAX CASH FLOW ATMARR = 8%
MACRS-GDS 3-YEAR PROPERTY CLASS
EOY BTCF DWO TI T ATCF MACRS(3)
0 -$800,000.00 -$800,000.00
1 $100,000.00 $266,640.00 -$166,640.00 -$66,656.00 $166,656.00 33.330
2 $200,000.00 $355,600.00 -$155,600.00 -$62,240.00 $262,240.00 44.450
3 $600,000.00 $59,240.00 $540,760.00 $216,304.00 $383,696.00 7.405
B5 = $118,520.00 PWAT = -$116,270.10 =NPV(G8,G14:G18)+G13
AWAT = -29,120.60 =PMT(G8,5,-G22)
IRRAT = 0.692% =IRR(G13:G18)
ERRAT = 2.492% =MIRR(G13:G18,,G8)
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND
THE INTERNAL REVENUE SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION IN
THE YEAR OF DISPOSAL, THE DEPRECIATION DEDUCTION IN YEAR 3 IS ONE-HALF
WHAT WOULD NORMALLY OCCUR. THE BOOK VALUE AT THE END OF 3 YEARS IS
EQUAL TO THE COST BASIS MINUS THE SUM OF THE FULL YEAR DEPRECIATION
CHARGES TAKEN IN YEARS 1 AND 2 AND THE ONE-HALF YEAR NOT TAKEN IN YEAR 3:
$800,000 – $266,640 – $355,600 – $59,240 = $118,520.00.
PROBLEM 9.35
a BASIS $58,500.00 BTCF -$150,000.00 TAX RATE 40.00% BASIS $87,500.00 BTCF -$125,000.00 TAX RATE 40.00%
EST SALV $0.00 USE LIFE 9
MARRAT = 10.00% EST SALV $0.00 USE LIFE 9 MARRAT = 10.00%
RCVD SALV $0.00 PERIODS 9 RCVD SALV $0.00 PERIODS 9
MACRS(3) MACRS(7)
EOY BTCF DWO TI T ATCF MACRS(3) EOY BTCF DWO TI T ATCF MACRS(7)
0 -$58,500.00 -$58,500.00 0 -$87,500.00 -$87,500.00
1 -$150,000.00 $19,498.05 –$169,498.05 -$67,799.22 -$82,200.78 33.33% 1 -$125,000.00 $12,503.75 –$137,503.75 -$55,001.50 -$69,998.50 14.29%
2 -$150,000.00 $26,003.25 –$176,003.25 -$70,401.30 -$79,598.70 44.45% 2 -$125,000.00 $21,428.75 –$146,428.75 -$58,571.50 -$66,428.50 24.49%
3 -$150,000.00 $8,663.85 -$158,663.85 –$63,465.54 -$86,534.46 14.81% 3 -$125,000.00 $15,303.75 -$140,303.75 -$56,121.50 -$68,878.50 17.49%
4 -$150,000.00 $4,334.85 -$154,334.85 –$61,733.94 -$88,266.06 7.41% 4 -$125,000.00 $10,928.75 -$135,928.75 -$54,371.50 -$70,628.50 12.49%
5 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 5 -$125,000.00 $7,813.75 -$132,813.75 -$53,125.50 -$71,874.50 8.93%
6 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 6 -$125,000.00 $7,805.00 -$132,805.00 -$53,122.00 -$71,878.00 8.92%
7 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 7 -$125,000.00 $7,813.75 -$132,813.75 -$53,125.50 -$71,874.50 8.93%
8 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 8 -$125,000.00 $3,902.50 -$128,902.50 -$51,561.00 -$73,439.00 4.46%
9 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 9 -$125,000.00 $0.00 -$125,000.00 -$50,000.00 -$75,000.00
SUM DEPR
MARRAT = 10% SUM DEPR MARRAT = 10%
$58,500.00
PWAT = -$557,337.81 $87,500.00 PWAT = -$494,176.05
BOOK VALUE
FWAT = -$1,314,173.41 BOOK VALUE FWAT = -$1,165,241.27
$0.00
AWAT = -$96,776.44 $0.00 AWAT = -$85,809.00
SELECT THE VIRTUAL MOLD APPARATUS COSTING $87,500.
b BASIS $87,500.00 BTCF -$143,279.07 GOAL SEEK CHANGED CELL TAX RATE 40.00%
EST SALV $0.00 USE LIFE 9
MARRAT = 10.00%
RCVD SALV $0.00 PERIODS 9
MACRS(7)
EOY BTCF DWO TI T ATCF MACRS(7)
0 -$87,500.00 -$87,500.00
1 -$143,279.07 $12,503.75 –$155,782.82 -$62,313.13 -$80,965.94 14.29%
2 -$143,279.07 $21,428.75 –$164,707.82 -$65,883.13 -$77,395.94 24.49%
3 -$143,279.07 $15,303.75 –$158,582.82 -$63,433.13 -$79,845.94 17.49%
4 -$143,279.07 $10,928.75 –$154,207.82 -$61,683.13 -$81,595.94 12.49%
5 -$143,279.07 $7,813.75 -$151,092.82 -$60,437.13 -$82,841.94 8.93%
6 -$143,279.07 $7,805.00 -$151,084.07 -$60,433.63 -$82,845.44 8.92%
7 -$143,279.07 $7,813.75 -$151,092.82 -$60,437.13 -$82,841.94 8.93%
8 -$143,279.07 $3,902.50 -$147,181.57 -$58,872.63 -$84,406.44 4.46%
9 -$143,279.07 $0.00 -$143,279.07 -$57,311.63 -$85,967.44
SUM DEPR
MARRAT = 10%
$87,500.00
PWAT = -$557,337.82
BOOK VALUE
FWAT = -$1,314,173.43
$0.00
AWAT = -$96,776.44 GOAL SEEK SET CELL
THE COST OF OPERATING MUST BE $143,279.07/YEAR FOR THE TWO ALTERNATIVES TO BE EQUIVALENT.
PROBLEM 9.36
BASIS $58,500.00 BTCF -$150,000.00 TAX RATE 40.00% BASIS $87,500.00 BTCF -$125,000.00 TAX RATE 40.00%
EST SALV $0.00 USE LIFE 9
MARRAT = 10.00% EST SALV $0.00 USE LIFE 9 MARRAT = 10.00%
RCVD SALV $0.00 PERIODS 9 RCVD SALV $0.00 PERIODS 9
a MACRS(5)
EOY BTCF DWO TI T ATCF MACRS(5) EOY BTCF DWO TI T ATCF MACRS(5)
0 -$58,500.00 -$58,500.00 0 -$87,500.00 -$87,500.00
1 -$150,000.00 $11,700.00 -$161,700.00 -$64,680.00 -$85,320.00 20.00% 1 -$125,000.00 $17,500.00 -$142,500.00 -$57,000.00 -$68,000.00 20.00%
2 -$150,000.00 $18,720.00 -$168,720.00 -$67,488.00 -$82,512.00 32.00% 2 -$125,000.00 $28,000.00 -$153,000.00 -$61,200.00 -$63,800.00 32.00%
3 -$150,000.00 $11,232.00 -$161,232.00 -$64,492.80 -$85,507.20 19.20% 3 -$125,000.00 $16,800.00 -$141,800.00 -$56,720.00 -$68,280.00 19.20%
4 -$150,000.00 $6,739.20 -$156,739.20 -$62,695.68 -$87,304.32 11.52% 4 -$125,000.00 $10,080.00 -$135,080.00 -$54,032.00 -$70,968.00 11.52%
5 -$150,000.00 $6,739.20 -$156,739.20 -$62,695.68 -$87,304.32 11.52% 5 -$125,000.00 $10,080.00 -$135,080.00 -$54,032.00 -$70,968.00 11.52%
6 -$150,000.00 $3,369.60 -$153,369.60 -$61,347.84 -$88,652.16 5.76% 6 -$125,000.00 $5,040.00 -$130,040.00 -$52,016.00 -$72,984.00 5.76%
7 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 7 -$125,000.00 $0.00 -$125,000.00 -$50,000.00 -$75,000.00
8 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 8 -$125,000.00 $0.00 -$125,000.00 -$50,000.00 -$75,000.00
9 -$150,000.00 $0.00 -$150,000.00 -$60,000.00 -$90,000.00 9 -$125,000.00 $0.00 -$125,000.00 -$50,000.00 -$75,000.00
SUM DEPR
MARRAT = 10% SUM DEPR MARRAT = 10%
$58,500.00
PWAT = -$558,717.85 $87,500.00 PWAT = -$492,362.67
BOOK VALUE
FWAT = -$1,317,427.46 BOOK VALUE FWAT = -$1,160,965.42
$0.00
AWAT = -$97,016.07 $0.00 AWAT = -$85,494.12
SELECT THE VIRTUAL MOLD APPARATUS COSTING $87,500.
b SLN
EOY BTCF DWO TI T ATCF EOY BTCF DWO TI T ATCF
0 -$58,500.00 -$58,500.00 0 -$87,500.00 -$87,500.00
1 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 1 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
2 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 2 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
3 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 3 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
4 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 4 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
5 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 5 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
6 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 6 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
7 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 7 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
8 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 8 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
9 -$150,000.00 $6,500.00 -$156,500.00 -$62,600.00 -$87,400.00 9 -$125,000.00 $9,722.22 -$134,722.22 -$53,888.89 -$71,111.11
SUM DEPR
MARRAT = 10% SUM DEPR MARRAT = 10%
$58,500.00
PWAT = -$561,838.68 $87,500.00 PWAT = -$497,030.58
BOOK VALUE
FWAT = -$1,324,786.22 BOOK VALUE FWAT = -$1,171,972.11
$0.00
AWAT = -$97,557.97 $0.00 AWAT = -$86,304.66
SELECT THE VIRTUAL MOLD APPARATUS COSTING $87,500.
PROBLEM 9.38
a BASIS $70,000.00 BTCF -$18,000.00 TAX RATE 40.00% BASIS $110,000.00 BTCF -$14,000.00 TAX RATE 40.00%
EST SALV $3,000.00 USE LIFE 16
MARRAT = 9.00% EST SALV $4,000.00 USE LIFE 16 MARRAT = 9.00%
RCVD SALV $3,000.00 PERIODS 16 RCVD SALV $4,000.00 PERIODS 16
MACRS(10) MACRS(5)
EOY BTCF DWO TI T ATCF MACRS(10) EOY BTCF DWO TI T ATCF MACRS(5)
0 -$70,000.00 -$70,000.00 0 -$110,000.00 -$110,000.00
1 -$18,000.00 $7,000.00 -$25,000.00 –$10,000.00 -$8,000.00 10.00% 1 -$14,000.00 $22,000.00 -$36,000.00 -$14,400.00 $400.00 20.00%
2 -$18,000.00 $12,600.00 -$30,600.00 -$12,240.00 -$5,760.00 18.00% 2 -$14,000.00 $35,200.00 -$49,200.00 -$19,680.00 $5,680.00 32.00%
3 -$18,000.00 $10,080.00 -$28,080.00 -$11,232.00 -$6,768.00 14.40% 3 -$14,000.00 $21,120.00 -$35,120.00 -$14,048.00 $48.00 19.20%
4 -$18,000.00 $8,064.00 -$26,064.00 –$10,425.60 -$7,574.40 11.52% 4 -$14,000.00 $12,672.00 -$26,672.00 -$10,668.80 -$3,331.20 11.52%
5 -$18,000.00 $6,454.00 -$24,454.00 -$9,781.60 –$8,218.40 9.22% 5 -$14,000.00 $12,672.00 -$26,672.00 -$10,668.80 -$3,331.20 11.52%
6 -$18,000.00 $5,159.00 -$23,159.00 -$9,263.60 -$8,736.40 7.37% 6 -$14,000.00 $6,336.00 -$20,336.00 -$8,134.40 -$5,865.60 5.76%
7 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 –$8,966.00 6.55% 7 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
8 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 –$8,966.00 6.55% 8 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
9 -$18,000.00 $4,592.00 -$22,592.00 -$9,036.80 –$8,963.20 6.56% 9 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
10 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 -$8,966.00 6.55% 10 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
11 -$18,000.00 $2,296.00 -$20,296.00 -$8,118.40 -$9,881.60 3.28% 11 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
12 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 -$10,800.00 12 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
13 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 -$10,800.00 13 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
14 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 -$10,800.00 14 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
15 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 -$10,800.00 15 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
16 -$15,000.00 $0.00 -$15,000.00 -$6,000.00 -$9,000.00 16 -$10,000.00 $0.00 -$10,000.00 -$4,000.00 -$6,000.00
SUM DEPR
MARRAT = 9% SUM DEPR MARRAT = 9%
$70,000.00
PWAT = -$140,304.52 $110,000.00 PWAT = –$144,376.93
BOOK VALUE
FWAT = -$557,051.86 BOOK VALUE FWAT = -$573,220.57
$0.00
AWAT = -$16,878.62 $0.00 AWAT = -$17,368.53
SELECT THE INVESTMENT COSTING $70,000.
b BASIS $104,039.51 GOAL SEEK CHANGED CELL BTCF -$14,000.00 TAX RATE 40.00%
EST SALV $4,000.00 USE LIFE 16
MARRAT = 9.00%
RCVD SALV $4,000.00 PERIODS 16
MACRS(5)
EOY BTCF DWO TI T ATCF MACRS(5)
0 -$104,039.51 -$104,039.51
1 -$14,000.00 $20,807.90 -$34,807.90 -$13,923.16 -$76.84 20.00%
2 -$14,000.00 $33,292.64 -$47,292.64 -$18,917.06 $4,917.06 32.00%
3 -$14,000.00 $19,975.59 -$33,975.59 -$13,590.23 -$409.77 19.20%
4 -$14,000.00 $11,985.35 -$25,985.35 -$10,394.14 -$3,605.86 11.52%
5 -$14,000.00 $11,985.35 -$25,985.35 -$10,394.14 -$3,605.86 11.52%
6 -$14,000.00 $5,992.68 -$19,992.68 -$7,997.07 -$6,002.93 5.76%
7 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
8 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
9 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
10 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
11 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
12 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
13 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
14 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
15 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
16 -$10,000.00 $0.00 -$10,000.00 -$4,000.00 -$6,000.00
SUM DEPR
MARRAT = 9%
$104,039.51
PWAT = -$140,304.51
BOOK VALUE
FWAT = -$557,051.83
$0.00
AWAT = -$16,878.62 GOAL SEEK SET CELL
THE COST OF THE MORE EXPENSIVE CONVEYOR MUST BE $104,039.51 FOR THE TWO TO BE EQUIVALENT.
PROBLEM 9.39
a BASIS $70,000.00 BTCF -$18,000.00 TAX RATE 40.00% BASIS $110,000.00 BTCF -$14,000.00 TAX RATE 40.00%
EST SALV $3,000.00 USE LIFE 16
MARRAT = 9.00% EST SALV $4,000.00 USE LIFE 16 MARRAT = 9.00%
RCVD SALV $3,000.00 PERIODS 16 RCVD SALV $4,000.00 PERIODS 16
MACRS(10) MACRS(10)
EOY BTCF DWO TI T ATCF MACRS(10) EOY BTCF DWO TI T ATCF MACRS(10)
0 -$70,000.00 -$70,000.00 0 -$110,000.00 -$110,000.00
1 -$18,000.00 $7,000.00 -$25,000.00 -$10,000.00 –$8,000.00 10.00% 1 -$14,000.00 $11,000.00 -$25,000.00 -$10,000.00 -$4,000.00 10.00%
2 -$18,000.00 $12,600.00 -$30,600.00 -$12,240.00 -$5,760.00 18.00% 2 -$14,000.00 $19,800.00 -$33,800.00 -$13,520.00 -$480.00 18.00%
3 -$18,000.00 $10,080.00 -$28,080.00 -$11,232.00 -$6,768.00 14.40% 3 -$14,000.00 $15,840.00 -$29,840.00 -$11,936.00 -$2,064.00 14.40%
4 -$18,000.00 $8,064.00 -$26,064.00 -$10,425.60 –$7,574.40 11.52% 4 -$14,000.00 $12,672.00 -$26,672.00 -$10,668.80 -$3,331.20 11.52%
5 -$18,000.00 $6,454.00 -$24,454.00 -$9,781.60 -$8,218.40 9.22% 5 -$14,000.00 $10,142.00 -$24,142.00 -$9,656.80 –$4,343.20 9.22%
6 -$18,000.00 $5,159.00 -$23,159.00 -$9,263.60 -$8,736.40 7.37% 6 -$14,000.00 $8,107.00 -$22,107.00 -$8,842.80 –$5,157.20 7.37%
7 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 -$8,966.00 6.55% 7 -$14,000.00 $7,205.00 -$21,205.00 -$8,482.00 –$5,518.00 6.55%
8 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 -$8,966.00 6.55% 8 -$14,000.00 $7,205.00 -$21,205.00 -$8,482.00 –$5,518.00 6.55%
9 -$18,000.00 $4,592.00 -$22,592.00 -$9,036.80 -$8,963.20 6.56% 9 -$14,000.00 $7,216.00 -$21,216.00 -$8,486.40 –$5,513.60 6.56%
10 -$18,000.00 $4,585.00 -$22,585.00 -$9,034.00 -$8,966.00 6.55% 10 -$14,000.00 $7,205.00 -$21,205.00 -$8,482.00 -$5,518.00 6.55%
11 -$18,000.00 $2,296.00 -$20,296.00 -$8,118.40 -$9,881.60 3.28% 11 -$14,000.00 $3,608.00 -$17,608.00 -$7,043.20 -$6,956.80 3.28%
12 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 –$10,800.00 12 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
13 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 –$10,800.00 13 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
14 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 –$10,800.00 14 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
15 -$18,000.00 $0.00 -$18,000.00 -$7,200.00 –$10,800.00 15 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
16 -$15,000.00 $0.00 -$15,000.00 -$6,000.00 -$9,000.00 16 -$10,000.00 $0.00 -$10,000.00 -$4,000.00 -$6,000.00
SUM DEPR
MARRAT = 9% SUM DEPR MARRAT = 9%
$70,000.00
PWAT = -$140,304.52 $110,000.00 PWAT = –$149,335.98
BOOK VALUE
FWAT = -$557,051.86 BOOK VALUE FWAT = -$592,909.50
$0.00
AWAT = -$16,878.62 $0.00 AWAT = -$17,965.10
SELECT THE CONVEYOR COSTING $70,000.
b
BASIS $97,599.56 GOAL SEEK CHANGED CELL BTCF -$14,000.00 TAX RATE 40.00%
EST SALV $4,000.00 USE LIFE 16
MARRAT = 9.00%
RCVD SALV $4,000.00 PERIODS 16
MACRS(10)
EOY BTCF DWO TI T ATCF MACRS(10)
0 -$97,599.56 -$97,599.56
1 -$14,000.00 $9,759.96 -$23,759.96 -$9,503.98 -$4,496.02 10.00%
2 -$14,000.00 $17,567.92 -$31,567.92 -$12,627.17 -$1,372.83 18.00%
3 -$14,000.00 $14,054.34 -$28,054.34 -$11,221.73 -$2,778.27 14.40%
4 -$14,000.00 $11,243.47 -$25,243.47 -$10,097.39 -$3,902.61 11.52%
5 -$14,000.00 $8,998.68 -$22,998.68 -$9,199.47 -$4,800.53 9.22%
6 -$14,000.00 $7,193.09 -$21,193.09 -$8,477.23 -$5,522.77 7.37%
7 -$14,000.00 $6,392.77 -$20,392.77 -$8,157.11 -$5,842.89 6.55%
8 -$14,000.00 $6,392.77 -$20,392.77 -$8,157.11 -$5,842.89 6.55%
9 -$14,000.00 $6,402.53 -$20,402.53 -$8,161.01 -$5,838.99 6.56%
10 -$14,000.00 $6,392.77 -$20,392.77 -$8,157.11 -$5,842.89 6.55%
11 -$14,000.00 $3,201.27 -$17,201.27 -$6,880.51 -$7,119.49 3.28%
12 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
13 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
14 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
15 -$14,000.00 $0.00 -$14,000.00 -$5,600.00 -$8,400.00
16 -$10,000.00 $0.00 -$10,000.00 -$4,000.00 -$6,000.00
SUM DEPR
MARRAT = 9%
$97,599.56
PWAT = -$140,304.51
BOOK VALUE
FWAT = -$557,051.83
$0.00
AWAT = -$16,878.62 GOAL SEEK SET CELL
THE COST OF THE MORE EXPENSIVE CONVEYOR MUST BE $97,599.56 FOR THE TWO TO BE EQUIVALENT.
IN THIS PROBLEM, WE ARE SEEKING THE COST OF THE SECOND CONVEYOR THAT MAKES THE
TWO ALTERNATIVES EQUIVALENT IN TERMS OF PW, FW, OR AW. DUE TO THE COMPLEXITY OF
THE ANALYSIS, IT IS MUCH EASIER TO USE A SEARCH PROCEDURE TO FIND THIS COST. USING
EXCEL, THE LOGICAL CHOICES FOR SEARCH ARE EITHER “SOLVER” OR “GOAL SEEK.” BELOW,
“GOAL SEEK” IS USED AND THE CRITERION IS TO TARGET THE VALUE OF “AW” TO EQUAL THAT OF
THE FIRST ALTERNATIVE. THE “CHANGED CELL” IS THE BASIS (OR COST).
PROBLEM 9.40
EOY END-OF-YEAR
BTCF BEFORE-TAX CASH FLOW
DWO DEPRECIATION WRITE-OFF (MACRS-GDS DEDUCTION)
TI TAXABLE INCOME
T TAX itr = 40%
ATCF AFTER-TAX CASH FLOW ATMARR = 15%
MACRS-GDS 7-YEAR PROPERTY CLASS
EOY BTCF DWO TI T ATCF MACRS(7)
0-$30,000.00 -$30,000.00
1$15,000.00 $4,287.00 $10,713.00 $4,285.20 $10,714.80 14.290
2$15,000.00 $7,347.00 $7,653.00 $3,061.20 $11,938.80 24.490
3$15,000.00 $5,247.00 $9,753.00 $3,901.20 $11,098.80 17.490
4$15,000.00 $3,747.00 $11,253.00 $4,501.20 $10,498.80 12.490
5$15,000.00 $2,679.00 $12,321.00 $4,928.40 $10,071.60 8.930
6$15,000.00 $2,676.00 $12,324.00 $4,929.60 $10,070.40 8.920
7$15,000.00 $2,679.00 $12,321.00 $4,928.40 $10,071.60 8.930
8$15,000.00 $1,338.00 $13,662.00 $5,464.80 $9,535.20 4.460
9$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
10 $15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
11 $15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
B5 = $0.00 PWAT = $24,626.98 =NPV(G8,G14:G18)+G13
METHODS IMPROVEMENT STUDY
EOY BTCF DWO TI T ATCF
0-$22,476.43 -$22,476.43
1$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
2$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
3$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
4$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
5$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
6$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
7$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
8$15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
11 $15,000.00 $0.00 $15,000.00 $6,000.00 $9,000.00 0.000
PWAT = $24,626.98 =NPV(G8,G31:G41)+G30
PROBLEM 9.41
a COST BASIS $100,000.00 $150,000.00
PLANNING HORIZON 6 6
USEFUL LIFE 6 8
SALVAGE VALUE $11,764.90 $39,321.60
ANNUAL OPERATING COSTS $2,500.00 $0.00
ATERNATIVE A
2 -$2,500.00 $32,000 -$34,500 -$13,800 $11,300 32.00
3 -$2,500.00 $19,200 -$21,700 -$8,680 $6,180 19.20
4 -$2,500.00 $11,520 -$14,020 -$5,608 $3,108 11.52
B6 = $0.00 PW = -$75,018.35
EUAC = $19,822.62
2$0.00 $48,000 -$48,000 -$19,200 $19,200 32.00
3$0.00 $28,800 -$28,800 -$11,520 $11,520 19.20
4$0.00 $17,280 -$17,280 -$6,912 $6,912 11.52
5$0.00 $17,280 -$17,280 -$6,912 $6,912 11.52
B6 = $0.00 PW = -$98,390.22
USEFUL LIFE 6 8
SALVAGE VALUE (6) $11,764.90 $25,165.82
SALVAGE VALUE (2) $49,000.00
ANNUAL OPERATING COSTS $2,500.00 $0.00
ATMARR 15%
ATERNATIVE A
2 -$2,500.00 $32,000 -$34,500 -$13,800 $11,300 32.00
3 -$2,500.00 $19,200 -$21,700 -$8,680 $6,180 19.20
4 -$2,500.00 $11,520 -$14,020 -$5,608 $3,108 11.52
5 -$2,500.00 $11,520 -$14,020 -$5,608 $3,108 11.52
7 -$2,500.00 $20,000 -$22,500 -$9,000 $6,500
8$46,500.00 $16,000 -$33,500 -$13,400 $59,900
B6 = $0.00 PW = -$78,933.00
B8 = $64,000 EUAC = $17,590.23
ATERNATIVE B
EOY BTCF(B) DWO(B) TI(B) T(B) ATCF(B) MACRS(5)
0 -$150,000.00 -$150,000
1$0.00 $30,000 -$30,000 -$12,000 $12,000 20.00
2$0.00 $48,000 -$48,000 -$19,200 $19,200 32.00
3$0.00 $28,800 -$28,800 -$11,520 $11,520 19.20
4$0.00 $17,280 -$17,280 -$6,912 $6,912 11.52
5$0.00 $17,280 -$17,280 -$6,912 $6,912 11.52
6$0.00 $8,640 –$8,640 -$3,456 $3,456 5.76
7$0.00 $0 $0 $0 $0
8$25,165.82 $0 $25,166 $10,066 $15,099
B6 = $0.00 PW = -$103,654.05
EUAC = $23,099.31
ALTERNATIVE A IS STILL BEST
NOTE: WITH ALTERNATIVE A, BECAUSE THE REPLACEMENT OF THE EQUIPMENT
IS SOLD AFTER 2 YEARS AND BEFORE IT IS FULLY DEPRECIATED, ONLY A ONE-
HALF YEAR DEPRECIATION IN THE YEAR OF DISPOSAL IS ALLOWED. HENCE,
THE DEPRECIATION DEDUCTION FOR ALTERNATIVE A IN YEAR 8 IS ONE-HALF
WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE END OF
YEAR 8 IS EQUAL TO THE PRODUCT OF THE COST BASIS AND ONE MINUS THE
SUM OF THE ONE AND ONE-HALF YEARS TAKEN IN YEARS 7 AND 8: $100,000(1-
PROBLEM 9.42
WHEN WE USE BTCF, THAT MEANS WE HAVE NOT YET DEDUCTED TAXES FROM THE CASH FLOW. (ALSO, THERE IS NO CASH FLOW DUE TO A LOAN
CONSIDERED.)
WHEN WE USE BTLCF, THAT MEANS WE HAVE NOT YET DEDUCTED TAXES, LOAN INTEREST, OR LOAN PRINCIPAL FROM THE CASH FLOW.
IN BOTH CASES, BTCF OR BTLCF IS CONSIDERED GROSS INCOME LESS EXPENSE DEDUCTIONS, WITH NO CONSIDERATION OF EITHER TAXES OR LOANS.
PROBLEM 9.43
BASIS $1,800,000.00
BORROWED 45.00%
INT RATE 12.50%
TAX RATE 40.00%
GI=BTLCF X
DWO $360,000.00
IPMT $101,250.00
PPMT $202,500.00
TI $328,000.00
a TI=X-DWO-IPMT= $328,000.00
X=DWO+IPMT+TI $789,250.00
TI=X-DWO-IPMT= $328,000.00
b T=TAX RATE*TI= $131,200.00
c ATCF=X-IPMT-PPMT-T= $354,300.00