A machine is needed to produce parts at the rate of 60 per hour. The operator to run the machine will be paid $11.47 per hour. The parts cost $.47 each and will be sold for $.93 each after this operation. This operation is expected to be needed for 7 years. SOYD depr will be used and 10% salvage is assumed. Assume that revenues, labor, and material costs flow uniformly and continuously throughout the year, and that the machine will run for 8 hours per day, 250 days per year. a. If the tax rate is 47% and MARR is 20%, how much can be spent on this machine? Solve this using the AEC equation and then construct a spreadsheet and use solver to solve this problem.
b. Assume SL depreciation is used. Repeat part a.
c. Assume 5 yr MACRS is used. Repeat part a.
d. Assume the first cost is expensed the first year and the salvage is income in year 7. Repeat part a