Tye Gаr wоuld like tо set up а retirement аccоunt that will pay him $100,000 annually forever adjusting for 3% inflation. Tye's retirement account will begin in 40 years. Assuming 6% interest during his retirement years and 10% interest for the next 40 years, how much will Tye need to save annually?
The Ally Gаtоr Cоrpоrаtion of Meаdville, PA, maker of Ally’s electronic components, is considering replacing one of its current hand-operated assembly machines with a new fully automated machine. Existing situation: Original depreciable value of old machine - $40,000 Expected life - 10 years Age -5 years old Expected salvage value in five years - $0 Current salvage value - $12,000 Marginal tax rate - 34 percent Proposed situation: Fully automated machine resulting in annual savings of $42,000 Cost of machine - $74,000 Installation fee - $6,000 Expected life - five years, depreciated down to $0 Salvage value in 5 years - $32,000 What are the relevant after-tax free cash flows?