Heron Corporation is planning to add manufacturing capacity by installing new high-tech machines. The machines would increase...

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Heron Corporation is planning to add manufacturingcapacity by installing new high-tech machines. The machines wouldincrease revenues by $180,000 per year and increase costs by$50,000 per year. The new machines cost $560,000 and would bedepreciated over 5 years using simplified straight line. Investmentin net working capital of $30,000 would be required at the time ofinstallation. The firm is planning to keep the machines for 7 yearsand then sell them for $80,000. The firm has a required rate ofreturn on investment projects of 13% and a tax rate of 21%. What isthe net present value of this project?
a) ($146,055) d)($26,209)
b) ($13,457) e)($18,015)
c) ($53,073)

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Heron Corporation is planning to add manufacturingcapacity by installing new high-tech machines. The machines wouldincrease revenues by $180,000 per year and increase costs by$50,000 per year. The new machines cost $560,000 and would bedepreciated over 5 years using simplified straight line. Investmentin net working capital of $30,000 would be required at the time ofinstallation. The firm is planning to keep the machines for 7 yearsand then sell them for $80,000. The firm has a required rate ofreturn on investment projects of 13% and a tax rate of 21%. What isthe net present value of this project?a) ($146,055) d)($26,209)b) ($13,457) e)($18,015) c) ($53,073)