//Variable declaration: TCC_TB = 2500000 //Total capital cost ($) R_TB = 3600000 //R_TBevenue generated from the facility ($) AOC_TB = 1200000 //Annual operating costs ($) TCC_FB = 3500000 //Total capital cost ($) R_FB = 5300000 //R_TBevenue generated from the facility ($) AOC_FB = 1400000 //Annual operating costs ($) n = 10 //Time of facility (yr) //Calculation: D = 0.1*TCC_TB //Depriciation ($) WC = 0.1*TCC_TB //Working capital ($) TI = R_TB-AOC_TB-D //Taxable income ($) IT = 0.5*TI //Income tax to be paid ($) A = R_TB-AOC_TB-IT //After-tax cash flow ($) function [ans] = eqTB(i) x = (((1+i)**n-1)/(i*(1+i)**n))*A + (1/(1+i)**n)*WC //Equation for computing rate of return for TB unit y = WC + 0.5*TCC_TB + 0.5*TCC_TB*(1+i)**1 //Equation for computing rate of return for TB unit ans = x-y endfunction iTB = ceil(fsolve(0.8,eqTB)*100) //Rate of return for TB unit (%) D = 0.1*TCC_FB //Depriciation ($) WC = 0.1*TCC_FB //Working capital ($) TI = R_FB-AOC_FB-D //Taxable income ($) IT = 0.5*TI //Income tax to be paid ($) A = R_FB-AOC_FB-IT //After-tax cash flow ($) function [ans] = eqFB(i) x = (((1+i)**n-1)/(i*(1+i)**n))*A + (1/(1+i)**n)*WC //Equation for computing rate of return for FB unit y = WC + 0.5*TCC_FB + 0.5*TCC_FB*(1+i)**1 //Equation for computing rate of return for FB unit ans = x-y endfunction iFB = fsolve(0.8,eqFB)*100 //Rate of return for FB unit (%) //Results: printf("The rate of return for TB unit is: %.0f %%",iTB) printf("The rate of return for FB unit is: %.1f %%",iFB)