Evergreen Pharmaceuticals is considering a new pill-coating machine to replace the existing one, which can be sold now for $50,000. The new machine costs $350,000 and requires $80,000 in working capital. It will yield additional cash inflows of $150,000 annually for four years. The new machine has a lifespan of four years and no salvage value.
•Calculate the NPV using a 14% required rate of return.
•Recommend whether the new machine should be purchased.