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Dorothy & George Company is planning to acquire a new machine...

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Accounting

Dorothy & George Company is planning to acquire a new machine at a total cost of $54,800. The machine's estimated life is 6 years
and its estimated salvage value is $500. The company estimates that annual cash savings from using this machine will be $11,000. The
company's after-tax cost of capital is 7% and its income tax rate is 40%. The company uses straight-line depreciation (non-MACRS-
based).(Use Appendix C, Table 1 and Appendix C, Table 2.)(Do not round intermediate calculations. Negative amounts should be
indicated by a minus sign. Round "Payback period" to 2 decimal places and all other answers to the nearest dollar amount.)
Required:
What is this investment's net after-tax annual cash inflow?
Assume that the net after-tax annual cash inflow of this investment is $8,000; what is the payback period in years?
Assume that the net after-tax annual cash inflow of this investment is $8,000; what is the net present value (NPV) of this investment?
What are the minimum net after-tax annual cost savings that make the proposed investment acceptable (i.e., the dollar cost savings
that would yield an NPV of $0)?
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