New equipment would permit the manufacture of 100,000 additional spark plugs every year. It will have a useful life of 5 years with no salvage value. The equipment will be depreciated using straight-line method. The plugs sell for $20 and cost $8 to manufacture using the new equipment. Indirect costs are remain the same. The equipment cost $3,000,000 to purchase and install. Company's tax rate is 34%.© BrainMass Inc. brainmass.com June 4, 2020, 3:52 am ad1c9bdddf
Your tutorial is in excel, attached. The after tax cash flows are mapped out for you and instructional notes are next to the computations to assist you.