Question: (10 points) Your company is considering a machine which will cost $100,000 at Time 0 and which can be sold after years for $200,000. $240,000
(10 points) Your company is considering a machine which will cost $100,000 at Time 0 and which can be sold after years for $200,000. $240,000 must be invested at Time 0 in inventories and receivables; these funds will be recovered when the operation is closed at the end of Year 5. The facility will produce sales revenues of $1,000,000 per year for 5 years; variable operating costs (excluding depreciation) will be 40 percent of sales No fixed costs will be incurred. Operating cash inflows will begin 1 year from today (att 1). By an act of Congress, the machine will have depreciation expenses of $30,000, $20,000, $15,000, 10,000, and 10,000 in Years 1, 2, 3, 4, and 5 respectively. The company has a 40 percent tax rate and a 10 percent cost of capital. What is the project's NPV? Show all steps and solutions and put your final answers in the box CE Fy CF NPV
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