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5 of 8 complet HW Score 0%, of Bets Score: 0 of 1 pt P12-20 (similar to) Question H O 500.000 Calculating project cash flows and NPV Rac c on he purchan c e to 1000 The year. To operate this machine property w w h o habang that would cost $22.000 ton to cost $5.500 tremely efficient purchase would necesitan increase inventory of $20.000 This machine has an expected of 10 years, which will have a d i c tiona r ies anyonal shows tha t of the pro . What is the initial Outly associated with this project b. What are the annual haras s e d with her for years through 97 c. What is the terminal cashow in year 10 , the annual era cash flow in year 10 d. Should this machine purchased The initial cash outy associated with this project is found to the nearest ) Score: 0 of 1 pt 5 of 8 (3 complete) HW Score: 37.5%, 3 of 8 pts P12-20 (similar to) Question Help (Calculating project cash flows and NPV) Raymobile Motors is considering the purchase of a new production machine for $360,000. The purchase of this machine will result in an increase in earnings before interest and taxes of $100,000 per year. To operate this machine properly, workers would have to go through a brief training session that would cost $22,000 after tax. In addition, it would cost $5,500 after tax to install this machine correctly. Also, because this machine is extremely efficient, its purchase would necessitate an increase in inventory of $26,000. This machine has an expected life of 10 years after which it will have no salvage value. Assume Simplified straight-line depreciation, that this machine is being depreciated down to zero, a 38 percent marginal tax rate, and a required rate of return of 9 percent a. What is the initial outlay associated with this project? b. What are the annual after-tax cash flows associated with this project for years 1 through 9? c. What is the terminal cash flow in year 10 (that is, the annual after-tax cash flow in year 10 plus any additional cash flows associated with termination of the project)? d. Should this machine be purchased? a. The initial cash outlay asociated with this project is (Round to the nearest dollar)

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