$($New project analysis$)$ Raymobile Motors is considering the purchase of a new production machine for $$500,000.$ The purchase of this machine will result in an increase in earnings before depreciation, interest, and taxes $($EBITDA$)$ of $$160,000$ per year. To operate this machine properly, workers would have to go through a brief training session that would cost $$30,000$ after taxes. It would cost $$5,000$ to install the machine properly. Also, because the machine is extremely efficient, its purchase would necessitate an increase in inventory of $$50,000.$ This machine has an expected life of $10$ years, will be depreciated down to zero using the bonus depreciation method with that depreciation taking place in year $1.$ Assume a $21$ percent marginal tax rate, and a required rate of return of $14$ percent.

a$.$ What is the initial outlay associated with this project?

b$.$ What are the annual after$-$tax cash flows associated with this project for years $1,$ and $2$ through $9?$

c$.$ What is the terminal cash flow in year $10($what is the annual after$-$tax cash flow in year $10$ plus any additional cash flows associated with the termination of the project$)?$

d$.$ Should the machine be purchased?

a$.$ What is the initial outlay associated with this project?

$($Round to the nearest dollar.$)$

b$.$ What is the after$-$tax cash flow associated with this project for year $1?$

$($Round to the nearest dollar.$)$

What are the annual after$-$tax cash flows associated with this project for years $2$ through $9($note that the cash flows for years $2$ through $9$ are equal$)?$

$ $($Round to the nearest dollar.$)$

c$.$ What is the terminal cash flow in year $10($what is the annual after$-$tax cash flow in year $10$ plus any additional cash flows associated with the termination of the project$)?$

$ $($Round to the nearest dollar.$)$

d$.$ What is the project's NPV given a required rate of return of $14$ percent?

$($Round to the nearest dollar.$)$

Should the machine be purchased? $($Select the best choice below.$)$

A$.$ No$.$ The project's NPV is negative.

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