ANSWER USING EXCEL: The Foundry is looking to purchase a new machine that has a purchase price of $$5,000,000,$ an MACRS class

life of $5$ years and an estimated sale price of $$300,000$ at the end of year $3.$ The new machine would be sold at

the end of its useful life $($at the end of year $3).$ The new machine is expected to increase revenues by $$500,000$

per year and increase fixed and variable costs by $$200,000($total together$)$ per year. The company will incur

working capital requirements which include a one$-$time increase in inventory of $$100,000,$ reversing the entry

for NWC at the end of the project.

The Company's tax rate is $30\%$ and its company's required return is $10\%.$

Question: Should the Foundry buy the machine? $($Show ALL calculations to support your answer and

receive full credit$)$ UPLOAD YOUR WORK TO FILE ATTACHMENT BELOW.

MACRS schedule for $5-$year class life: