Use an effective tax rate of 32% to determine

Chapter 17, Problem 17.33

(choose chapter or problem)

Use an effective tax rate of 32% to determine threeparameters: CFAT, NOPAT, and PW of taxes (i =6% per year) associated with a new-technologyMRI machine (first cost of $30,000) recentlylocated at the county-government-funded ZendraHospital in San Francisco. Analyze two differentdepreciation scenarios: (1) uniform write-off of$6000 per year, and (2) accelerated depreciationof $6000, $9600, $5760, and $3456 in years 1through 4, respectively. Which one is the betterdepreciation schedule using the criteria (a) totalNOPAT, and (b) PW of taxes? (All cash amountsare in $1000 units.)Estimates, $Year GI OE P D TI Taxes CFAT NOPAT0 30 30 1 8 2 2 15 4 3 12 3 4 10 5

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