Your company is considering a machine that will cost $1,000 at Time 0 and which can...

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Your company is considering a machine that will cost $1,000 atTime 0 and which can be sold after 3 years for $100. To operate themachine, $205 must be invested at Time 0 in inventories; thesefunds will be recovered when the machine is retired at the end ofYear 3. The machine will produce sales revenues of $900/year for 3years; variable operating costs (excluding depreciation) will be 50percent of sales. Operating cash inflows will begin 1 year fromtoday (at Time 1). The machine will have depreciation expenses of$500, $300, and $200 in Years 1, 2, and 3, respectively. Thecompany has a 40 percent tax rate, enough taxable income from otherassets to enable it to get a tax refund from this project if theproject's income is negative, and a 10 percent required rate ofreturn. Inflation is zero. What is the project's NPV? a. $9.15 b.$7.89 c. $6.24 d. $10.41 e. $2.89

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Your company is considering a machine that will cost $1,000 atTime 0 and which can be sold after 3 years for $100. To operate themachine, $205 must be invested at Time 0 in inventories; thesefunds will be recovered when the machine is retired at the end ofYear 3. The machine will produce sales revenues of $900/year for 3years; variable operating costs (excluding depreciation) will be 50percent of sales. Operating cash inflows will begin 1 year fromtoday (at Time 1). The machine will have depreciation expenses of$500, $300, and $200 in Years 1, 2, and 3, respectively. Thecompany has a 40 percent tax rate, enough taxable income from otherassets to enable it to get a tax refund from this project if theproject's income is negative, and a 10 percent required rate ofreturn. Inflation is zero. What is the project's NPV? a. $9.15 b.$7.89 c. $6.24 d. $10.41 e. $2.89