CEE 5110 Lecture Notes - Lecture 7: Weighted Arithmetic Mean, Cost Basis, Nopat

• School: Temple University
• Department: Civil Engineering
• Course: CEE 5110
• Professor: Dr.Mille

Document Summary

Lecture 7: decpreciation and income taxes: the objective of chapter 7 is to explain how depreciation affects income taxes, and how income taxes affect economic decision making, income taxes usually represent a significant cash outflow. In this chapter we describe how after tax liabilities and after-tax cash flows result in the after-tax cash flow (atcf) procedure. The cost basis is allocated equally over the number of units produced over the asset"s life. The depreciation per unit of production is found from the formula below: the modified accelerated cost recovery system (macrs) is the principle method for computing depreciation for property in engineering projects. The analysis is conducted using the after-tax marr: cash flows are typically determined for each year using the notation below, some important cash flow formulas, acme purchased a pump for ,000 and expended ,000 for shipping and installation. The addition of this pump will result in an increase in revenue of.