Question: Need answer for a. b. and c. Athirah Manufacturing Inc. is a leading fresh meat processing company in Malaysia. The company is considering purchasing a

Need answer for a. b. and c. Athirah Manufacturing Inc. is aNeed answer for a. b. and c.

Athirah Manufacturing Inc. is a leading fresh meat processing company in Malaysia. The company is considering purchasing a new production machine for RM380,000.00. The purchase of this machine will result in an increase in earnings before interest and tax of RM130,000.00 per year. It takes RM12,000.00 to install the machine properly. In addition, to operate the machine effectively, employees have to go through a brief training session that costs RM8,000.00 after tax. Furthermore, because this machine is very efficient, its purchase will require an increase in inventory of RM35,000.00. This machine will be depreciated by the straight-line method over the project's 13-year life, after which it will have no salvage value. Finally, to buy the new machine, it appears the firm will have to borrow RM250,000.00 at a 9 percent interest rate from its local bank, resulting in an additional interest payment of RM22,500.00 a year. The marginal tax rate is 29 percent and the required rate of return for this project is 13 percent. REQUIRED: a. What is the initial outlay associated with the purchase of the new production machine? b. What are the annual after-tax cash flows associated with this project for years 1 through 13? c. What is the terminal cash flow in year 13 ? d. Calculate the payback period for this project. e. Calculate the payback period and net present value for this project. f. Should the machine be purchased? Justify your

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