ComputeTaxAndDepreciation Subroutine

private subroutine ComputeTaxAndDepreciation()

Arguments

None
Called By

Source Code

SUBROUTINE ComputeTaxAndDepreciation
          ! SUBROUTINE INFORMATION:
          !    AUTHOR         Jason Glazer of GARD Analytics, Inc.
          !    DATE WRITTEN   August 2010
          !    MODIFIED       na
          !    RE-ENGINEERED  na

          ! PURPOSE OF THIS SUBROUTINE:
          !    Compute the present value after factoring in taxes
          !    and depreciation.

          ! METHODOLOGY EMPLOYED:

          ! REFERENCES:
          ! na

          ! USE STATEMENTS:
IMPLICIT NONE    ! Enforce explicit typing of all variables in this routine


          ! SUBROUTINE ARGUMENT DEFINITIONS:
          ! na

          ! SUBROUTINE PARAMETER DEFINITIONS:
INTEGER, PARAMETER :: SizeDepr =  41

          ! INTERFACE BLOCK SPECIFICATIONS
          ! na

          ! DERIVED TYPE DEFINITIONS
          ! na

          ! SUBROUTINE LOCAL VARIABLE DECLARATIONS:
REAL(r64),DIMENSION(SizeDepr) :: DepreciationPercent !values expressed as percent 5% is 5.0 (based on tables)
REAL(r64) :: curCapital
INTEGER :: curDepYear
INTEGER :: iYear
INTEGER :: jYear

ALLOCATE(DepreciatedCapital(lengthStudyYears))
ALLOCATE(TaxableIncome(lengthStudyYears))
ALLOCATE(Taxes(lengthStudyYears))
ALLOCATE(AfterTaxCashFlow(lengthStudyYears))
ALLOCATE(AfterTaxPresentValue(lengthStudyYears))

! Depreciation factors are based on IRS Publication 946 for 2009 "How to Depreciate Property"
! The MACRS valus are based on Modified Accelerated Cost Recovery System GDS for 3, 5, 7, 10 year
! property are based on 200% depreciation method shown in Appendix A using half year. 15 and 20 are
! based on 150% (Chart 1). For Straight Line depreciation GDS is used for 27 years (actually 27.5)
! 31 years (actually 31.5 years) and 39 years using mid month. For 40 years ADS is used (chart 2)
! Table A-1 is used for 3, 4, 5, 10, 15 and 20 years. Table A-6 is for 27 years. Table A-7 for 31 years.
! Table A-7a for 39 years. Table A-13 for 40 years. These years are a classification of property
! and should not be confused with the length of the study. For 27 years, 31 years, 39 years and 40 years
! the June value was used.
DepreciationPercent = 0.0d0 !default all values to zero
SELECT CASE (depreciationMethod)
  CASE(depMethMACRS3)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 33.33d0
    DepreciationPercent(2) = 44.45d0
    DepreciationPercent(3) = 14.81d0
    DepreciationPercent(4) = 7.41d0
  CASE(depMethMACRS5)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 20.0d0
    DepreciationPercent(2) = 32.0d0
    DepreciationPercent(3) = 19.2d0
    DepreciationPercent(4) = 11.52d0
    DepreciationPercent(5) = 11.52d0
    DepreciationPercent(6) = 5.76d0
  CASE(depMethMACRS7)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 14.29d0
    DepreciationPercent(2) = 24.49d0
    DepreciationPercent(3) = 17.49d0
    DepreciationPercent(4) = 12.49d0
    DepreciationPercent(5) = 8.93d0
    DepreciationPercent(6) = 8.92d0
    DepreciationPercent(7) = 8.93d0
    DepreciationPercent(8) = 4.46d0
  CASE(depMethMACRS10)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 10.0d0
    DepreciationPercent(2) = 18.0d0
    DepreciationPercent(3) = 14.4d0
    DepreciationPercent(4) = 11.52d0
    DepreciationPercent(5) = 9.22d0
    DepreciationPercent(6) = 7.37d0
    DepreciationPercent(7) = 6.55d0
    DepreciationPercent(8) = 6.55d0
    DepreciationPercent(9) = 6.56d0
    DepreciationPercent(10) = 6.55d0
    DepreciationPercent(11) = 3.28d0
  CASE(depMethMACRS15)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 5.0d0
    DepreciationPercent(2) = 9.5d0
    DepreciationPercent(3) = 8.55d0
    DepreciationPercent(4) = 7.7d0
    DepreciationPercent(5) = 6.93d0
    DepreciationPercent(6) = 6.23d0
    DepreciationPercent(7) = 5.9d0
    DepreciationPercent(8) = 5.9d0
    DepreciationPercent(9) = 5.91d0
    DepreciationPercent(10) = 5.9d0
    DepreciationPercent(11) = 5.91d0
    DepreciationPercent(12) = 5.9d0
    DepreciationPercent(13) = 5.91d0
    DepreciationPercent(14) = 5.9d0
    DepreciationPercent(15) = 5.91d0
    DepreciationPercent(16) = 2.95d0
  CASE(depMethMACRS20)  ! IRS Publication 946 for 2009 Table A-1
    DepreciationPercent(1) = 3.75d0
    DepreciationPercent(2) = 7.219d0
    DepreciationPercent(3) = 6.677d0
    DepreciationPercent(4) = 6.177d0
    DepreciationPercent(5) = 5.713d0
    DepreciationPercent(6) = 5.285d0
    DepreciationPercent(7) = 4.888d0
    DepreciationPercent(8) = 4.522d0
    DepreciationPercent(9) = 4.462d0
    DepreciationPercent(10) = 4.461d0
    DepreciationPercent(11) = 4.462d0
    DepreciationPercent(12) = 4.461d0
    DepreciationPercent(13) = 4.462d0
    DepreciationPercent(14) = 4.461d0
    DepreciationPercent(15) = 4.462d0
    DepreciationPercent(16) = 4.461d0
    DepreciationPercent(17) = 4.462d0
    DepreciationPercent(18) = 4.461d0
    DepreciationPercent(19) = 4.462d0
    DepreciationPercent(20) = 4.461d0
    DepreciationPercent(21) = 2.231d0
  CASE(depMethStraight27)  ! IRS Publication 946 for 2009 Table A-6 (June)
    DepreciationPercent(1) = 1.97d0
    DepreciationPercent(2) = 3.636d0
    DepreciationPercent(3) = 3.636d0
    DepreciationPercent(4) = 3.636d0
    DepreciationPercent(5) = 3.636d0
    DepreciationPercent(6) = 3.636d0
    DepreciationPercent(7) = 3.636d0
    DepreciationPercent(8) = 3.636d0
    DepreciationPercent(9) = 3.636d0
    DepreciationPercent(10) = 3.637d0
    DepreciationPercent(11) = 3.636d0
    DepreciationPercent(12) = 3.637d0
    DepreciationPercent(13) = 3.636d0
    DepreciationPercent(14) = 3.637d0
    DepreciationPercent(15) = 3.636d0
    DepreciationPercent(16) = 3.637d0
    DepreciationPercent(17) = 3.636d0
    DepreciationPercent(18) = 3.637d0
    DepreciationPercent(19) = 3.636d0
    DepreciationPercent(20) = 3.637d0
    DepreciationPercent(21) = 3.636d0
    DepreciationPercent(22) = 3.637d0
    DepreciationPercent(23) = 3.636d0
    DepreciationPercent(24) = 3.637d0
    DepreciationPercent(25) = 3.636d0
    DepreciationPercent(26) = 3.637d0
    DepreciationPercent(27) = 3.636d0
    DepreciationPercent(28) = 3.485d0
  CASE(depMethStraight31)  ! IRS Publication 946 for 2009 Table A-7 (June)
    DepreciationPercent(1) = 1.72d0
    DepreciationPercent(2) = 3.175d0
    DepreciationPercent(3) = 3.175d0
    DepreciationPercent(4) = 3.175d0
    DepreciationPercent(5) = 3.175d0
    DepreciationPercent(6) = 3.175d0
    DepreciationPercent(7) = 3.175d0
    DepreciationPercent(8) = 3.174d0
    DepreciationPercent(9) = 3.175d0
    DepreciationPercent(10) = 3.174d0
    DepreciationPercent(11) = 3.175d0
    DepreciationPercent(12) = 3.174d0
    DepreciationPercent(13) = 3.175d0
    DepreciationPercent(14) = 3.174d0
    DepreciationPercent(15) = 3.175d0
    DepreciationPercent(16) = 3.174d0
    DepreciationPercent(17) = 3.175d0
    DepreciationPercent(18) = 3.174d0
    DepreciationPercent(19) = 3.175d0
    DepreciationPercent(20) = 3.174d0
    DepreciationPercent(21) = 3.175d0
    DepreciationPercent(22) = 3.174d0
    DepreciationPercent(23) = 3.175d0
    DepreciationPercent(24) = 3.174d0
    DepreciationPercent(25) = 3.175d0
    DepreciationPercent(26) = 3.174d0
    DepreciationPercent(27) = 3.175d0
    DepreciationPercent(28) = 3.174d0
    DepreciationPercent(29) = 3.175d0
    DepreciationPercent(30) = 3.174d0
    DepreciationPercent(31) = 3.175d0
    DepreciationPercent(32) = 3.042d0
  CASE(depMethStraight39)  ! IRS Publication 946 for 2009 Table A-7a (June)
    DepreciationPercent(1) = 1.391d0
    DepreciationPercent(2) = 2.564d0
    DepreciationPercent(3) = 2.564d0
    DepreciationPercent(4) = 2.564d0
    DepreciationPercent(5) = 2.564d0
    DepreciationPercent(6) = 2.564d0
    DepreciationPercent(7) = 2.564d0
    DepreciationPercent(8) = 2.564d0
    DepreciationPercent(9) = 2.564d0
    DepreciationPercent(10) = 2.564d0
    DepreciationPercent(11) = 2.564d0
    DepreciationPercent(12) = 2.564d0
    DepreciationPercent(13) = 2.564d0
    DepreciationPercent(14) = 2.564d0
    DepreciationPercent(15) = 2.564d0
    DepreciationPercent(16) = 2.564d0
    DepreciationPercent(17) = 2.564d0
    DepreciationPercent(18) = 2.564d0
    DepreciationPercent(19) = 2.564d0
    DepreciationPercent(20) = 2.564d0
    DepreciationPercent(21) = 2.564d0
    DepreciationPercent(22) = 2.564d0
    DepreciationPercent(23) = 2.564d0
    DepreciationPercent(24) = 2.564d0
    DepreciationPercent(25) = 2.564d0
    DepreciationPercent(26) = 2.564d0
    DepreciationPercent(27) = 2.564d0
    DepreciationPercent(28) = 2.564d0
    DepreciationPercent(29) = 2.564d0
    DepreciationPercent(30) = 2.564d0
    DepreciationPercent(31) = 2.564d0
    DepreciationPercent(32) = 2.564d0
    DepreciationPercent(33) = 2.564d0
    DepreciationPercent(34) = 2.564d0
    DepreciationPercent(35) = 2.564d0
    DepreciationPercent(36) = 2.564d0
    DepreciationPercent(37) = 2.564d0
    DepreciationPercent(38) = 2.564d0
    DepreciationPercent(39) = 2.564d0
    DepreciationPercent(40) = 1.177d0
  CASE(depMethStraight40)  ! IRS Publication 946 for 2009 Table A-13 (June)
    DepreciationPercent(1) = 1.354d0
    DepreciationPercent(2) = 2.5d0
    DepreciationPercent(3) = 2.5d0
    DepreciationPercent(4) = 2.5d0
    DepreciationPercent(5) = 2.5d0
    DepreciationPercent(6) = 2.5d0
    DepreciationPercent(7) = 2.5d0
    DepreciationPercent(8) = 2.5d0
    DepreciationPercent(9) = 2.5d0
    DepreciationPercent(10) = 2.5d0
    DepreciationPercent(11) = 2.5d0
    DepreciationPercent(12) = 2.5d0
    DepreciationPercent(13) = 2.5d0
    DepreciationPercent(14) = 2.5d0
    DepreciationPercent(15) = 2.5d0
    DepreciationPercent(16) = 2.5d0
    DepreciationPercent(17) = 2.5d0
    DepreciationPercent(18) = 2.5d0
    DepreciationPercent(19) = 2.5d0
    DepreciationPercent(20) = 2.5d0
    DepreciationPercent(21) = 2.5d0
    DepreciationPercent(22) = 2.5d0
    DepreciationPercent(23) = 2.5d0
    DepreciationPercent(24) = 2.5d0
    DepreciationPercent(25) = 2.5d0
    DepreciationPercent(26) = 2.5d0
    DepreciationPercent(27) = 2.5d0
    DepreciationPercent(28) = 2.5d0
    DepreciationPercent(29) = 2.5d0
    DepreciationPercent(30) = 2.5d0
    DepreciationPercent(31) = 2.5d0
    DepreciationPercent(32) = 2.5d0
    DepreciationPercent(33) = 2.5d0
    DepreciationPercent(34) = 2.5d0
    DepreciationPercent(35) = 2.5d0
    DepreciationPercent(36) = 2.5d0
    DepreciationPercent(37) = 2.5d0
    DepreciationPercent(38) = 2.5d0
    DepreciationPercent(39) = 2.5d0
    DepreciationPercent(40) = 2.5d0
    DepreciationPercent(41) = 1.146d0
END SELECT
! convert construction costs (not salvage) into depreciation
DepreciatedCapital = 0.0d0 ! set all years to zero
DO iYear = 1, lengthStudyYears
  curCapital = CashFlow(costCatConstruction)%yrAmount(iYear) + CashFlow(costCatOtherCapital)%yrAmount(iYear)
  DO jYear = 1, SizeDepr
    curDepYear = iYear + jYear - 1 !start depreciating with the year that the capital was shown and go to years following
    IF (curDepYear .LE. lengthStudyYears) THEN
      DepreciatedCapital(curDepYear) = DepreciatedCapital(curDepYear) + curCapital * (DepreciationPercent(jYear) / 100)
    END IF
  END DO
END DO
! Using Newnan pg 3880
!   before-tax cash flow
!   depreciation
!   taxable income (before-tax cash flow - depreciation)
!   income taxes (taxable income x incremental tax rate)
!   after-tax cash flow (before-tax cash flow - income taxes)
DO iYear = 1, lengthStudyYears
  TaxableIncome(iYear) = CashFlow(costCatTotGrand)%yrAmount(iYear) - DepreciatedCapital(iYear)
  Taxes(iYear) = TaxableIncome(iYear) * taxRate
  AfterTaxCashFlow(iYear) = CashFlow(costCatTotGrand)%yrAmount(iYear) - Taxes(iYear)
  ! the present value after taxes is pretax present value minus the present value of the taxes
  AfterTaxPresentValue(iYear) = CashFlow(costCatTotGrand)%yrPresVal(iYear) - Taxes(iYear) * SPV(iYear)
END DO
END SUBROUTINE ComputeTaxAndDepreciation
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