Answer is NPV = 15657

"A special-purpose machine tool set would cost $20,000. The tool set will be financed by a $10,000 bank loan repayable in two equal annual installments at 10% compounded annually. The tool is expected to provide annual (material) savings of $30,000 for two years and CCA rate of 100%. The tool will require annual O&M costs in the amount of S5,000. The salvage value at the end of the two years is expected to be $8,000. Assuming a marginal tax rate of 40% and MARR of 15%, what is the net present worth of this project and should it be invested in? You may use the following worksheet in your calculation:'" Cash Flow Statement Operating activities Net income CCA Investment activities Investment Salvage Gains tax (40% Financial activities Borrowed funds Principal repavment Net cash flow 8,400 10,000 8,686 10,000 -20,000 8,000 10,000 $10,000 "A special-purpose machine tool set would cost $20,000. The tool set will be financed by a $10,000 bank loan repayable in two equal annual installments at 10% compounded annually. The tool is expected to provide annual (material) savings of $30,000 for two years and CCA rate of 100%. The tool will require annual O&M costs in the amount of S5,000. The salvage value at the end of the two years is expected to be $8,000. Assuming a marginal tax rate of 40% and MARR of 15%, what is the net present worth of this project and should it be invested in? You may use the following worksheet in your calculation:'" Cash Flow Statement Operating activities Net income CCA Investment activities Investment Salvage Gains tax (40% Financial activities Borrowed funds Principal repavment Net cash flow 8,400 10,000 8,686 10,000 -20,000 8,000 10,000 $10,000