Estimating Cash Flows 1-6. Andre Young a a financial analyst at Rhodes Manufacturing Corporation, is try k to analyze the feasibibility of purchasing a new piece of equipmentt that falls undender the MACRS fiye-year class. The initial investment including the cost of equipment and its start-up, would be $375, 000. Over the next six years the following earnings before depreciation and taxes (EBDT) will be generated from using this equipment: Rhodes's discount rate is 13 percent and the company is in the 40 percent tax bracket. There is no salvage value at the end of year 6. Should Mr. Young recommend acceptance of the project? Estimating Cash Flows 11-7. Assume the same cash flows, initial investment, MACRS class, discount rate, and income tax rate as given in problem 11 -6. Now assume that the resale value oof the equipment at the end of six years will be $50,000 Calculate the NPV and recommend whether the project should be accepted