Craig Industries has an o

Craig Industries has an o

Craig Industries has an opportunity to expand one of its production facilities at a cost of $375,000. If the expansion is undertaken Craig Industries expect their income will increase y $60,000 for year 1 and then increase by $5,000 each year through year 10. The annual operating cost is expected to be $10,000 the first year and increase by $1000/year thereafter. The company will depreciate the equipment using a 7 year MACRS. The expected market value at the end of 10 years is $75,000 and the tax rate is 34%.What is the IRR ___________ on the BTCF?What is the present worth __________ of the after tax cash flow if MARR is 15%?What is the tax____________ on the depreciation recapture?

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