A new machine cost $700,000 and will be useful for 5 years. The machine will be depreciated to zero on a straight-line basis over its 5-year life. The new machine will generate annual revenue of $400,000 and will cost $100,000 per year for running. At the end of 5 years, the machine would have zero salvage value. The discount rate is 7%, and the corporate tax rate is 30%. Step your steps, find out the Net present value and Internal rate of return of buying the new machine.

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CALCULATION OF NET PRESENT VALUE NET PRESENT VALUE PRESENT VALUE OF CASH INFLOWS Less PRESENT VALUE ... View the full answer