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(New project analysis Raymobile Motors conso eing the purchase of a new product on machine for S 00 000 The purchase of thes 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 sossion that would cost $35,000 after taxes It would cost $7,000 to install the machine propery. Also, because the machine is extremely efficient, ils purchase would necessitate an increase in inventory of $45,000. This machine has an expected life of 10 years, after which it will have no salvage value. Assume simplified straight-line depreciation and that this machine is being deprecialed down to zero, a 35 percent marginal tax rate, and a required rate of return of 18 percent a. What is the initial outlay associaled with this project? b.What are the annual after tax cash flows associated with this project for yoars 1 through 9 c. What is the terminal cash fow in year 10 (what is the annual after-tax cash flow in year 10 plus any additional cash flows associated with the termination of the project)? d. Should the machine be purchased? a. What is the intial outiay associated with this project? (Round to the nearest dolla) b. What are the annual after-tax cash flows associated with this project for years 1 through 9 (note that the cash tlows for years 1 through 9 are equal)? s for a (Round to the nearest dollax) c. What is the terminal cash flow in yeor 10 (what is the annual after tax cash flow in year 10 plus any additional cash flows associated with the tormination of the project)? S (Round to the nearest dollar) d. What is the projects NPV given a required rate of return of 18 percent? (Round to the nearest dollar) Should the machine be purchased? (Select the bost choice below) Click to select your answerls)

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