Question: 3. Do-lb Yourself Industrics is considering investing in a machine that will cost $125,000 and will last for three years. The machine will generate

3. Do-lb Yourself Industrics is considering investing in a machine that will

3. Do-lb Yourself Industrics is considering investing in a machine that will cost $125,000 and will last for three years. The machine will generate revenues of S120,OOO each year and the cost of goods sold will be of sales. At the end of year three the machine will be sold for $15,000. The appropriate cost of capital is and DcIt-YourseIf is in the 35% tax bracket. Assume that Do-it-yourself's new machine will be depreciated straight line to a book value of $5,000 (NOT TO ZERO) at the end of year three. a) (5 points) What is the after-tax salwge value of this project? b) (5 points) What is the NPV for this Droiect?

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