Question: A new device costing $488307 is being considered by Alpha Manufacturing as a potential investment designed to increase annual revenues by $64456 per annum. Annual

A new device costing $488307 is being considered by Alpha Manufacturing as a potential investment designed to increase annual revenues by $64456 per annum. Annual operating expenses would also subsequently increase by $34841 per annum. Installation and delivery will cost $17648 in total. The machinery is to be depreciated over a 11 year useful life to a $51780 residual value. This project is not anticipated to change the firms net working capital. The firms marginal tax rate is 40 percent and cost of capital is 7 percent.

What are the projects annual net cash flows, assuming the new device is purchased?

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