An asset in the five-year MACRS property class cost $100,000 and has a zero estimated salvage value after six years of use. The asset will generate annual revenues of $300,000 and will require $100,000 in annual labor costs and $50,000 in annual material expenses. There are no other revenues and expenses. Assume a tax rate of 40%.(a) Compute the after-tax cash flows over the project life.(b) Compute the NPW at MARR = 12%. Is this investment acceptable·!(c) Compute the IRR for this project.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.