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Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $200,000 that would save it $35,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The machine would require an additional $3,000 in net operating working capital. The appropriate cost of capital for this project is 16% and the company's tax rate is 35%. Year 0 Year 1 Year 2 Year 3 0 35,000 0 66,667 0 -31,667 35,000 66,667 -31,667 35,000 66,667 -31,667 Cost savings Depreciation EBIT Taxes (35%) Net income Depreciation NOPAT + DEP CAPEX ANOWC FCF My courses > Accepi Sec HW5 IBM Attempt 1/3 for 10 pts. Part 1 What is the free cash flow in year 0? Choose the right sign. 0+ decimals Submit IB Attempt 1/3 for 10 pts. Part 2 What is the free cash flow in year 1? 0+ decimals Submit Part 3 What is the free cash flow in year 2? Te Attempt 1/3 for 10 pts. Accepi My courses Sec 01 > HW5 Tartu What is the free cash flow in year 2? 0+ decimals Submit Part 4 IB Attempt 1/3 for 10 pts. What is the free cash flow in year 3? Hint: add the recovery of net operating working capital. 0+ decimals Submit Part 5 What is the NPV of this project? JB Attempt 1/3 for 10 pts. 0+ decimals

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