Mars Inc. is considering a 5-year project that requires a new machine that costs $51,000,...
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Mars Inc. is considering a 5-year project that requires a new machine that costs $51,000, and an additional net working capital of $3,000, which will be recovered when the project ends in 5 years. This project would increase the firm's revenues by $24,000 per year and its operating costs by $11,000 per year. Mars will use the 3 year MACRS to depreciate the machine, and it expects to sell the machine at the end of the project for $20,000. The firm's marginal tax rate is 29 percent, and the project's cost of capital is 14 percent. What is the net cash flow at year 5 , the final year? MACRS 3-year schedule is as follows: 33%,45%,15%, and 7% for years 1 to 4 , respectively
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