Question: A new device costing $530163 is being considered by Alpha Manufacturing as a potential investment designed to increase annual revenues by $85339 per annum. Annual

A new device costing $530163 is being considered by Alpha Manufacturing as a potential investment designed to increase annual revenues by $85339 per annum. Annual operating expenses would also subsequently increase by $28415 per annum. Installation and delivery will cost $26336 in total. The machinery is to be depreciated over a 12 year useful life to a $77723 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 6 percent.

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

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