Question: It costs $ 8 3 , 0 0 0 to purchase and install a new machine that will let the company cut costs for 6

It costs $83,000 to purchase and install a new machine that will let the company cut costs for 6 years. The machine will be depreciated linearly to zero over 10 years, and can be sold for $12,450 after 6 years.
Every year starting right now, the project requires an investment of $5,000 for net working capital. After 6 years, the stock of net working capital will be recouped.
The marginal tax rate is 35% and the required return is 14%.
What is the after-tax salvage value of the machine in year 6?
What is the present value of operating cash flows (EBIT(1-t)+ Dep.) to break even?
At what level of annual operating cash flows (OCF) does the project break even?
At what level of annual cost savings does the project break even?

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