Question: Please number answers !!!! QUESTION 12 20 points Save Answ The Auto Alen Company is considering adding a robotic machine to its production line. Its

Please number answers !!!!Please number answers !!!! QUESTION 12 20 points Save Answ The Auto

QUESTION 12 20 points Save Answ The Auto Alen Company is considering adding a robotic machine to its production line. Its base price is $1.500.000 and it would cost another $30.000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $750,000. The MACRS rates for the first 3 years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $20,000. The machine would not change revenues, but it is expected to save the firm $600.000 per year in before-tax operating costs, mainly labor. The company's marginal tax rate is 40%. a. What is the Year-O cash flow? (5 points) b. What are the net operating cash flows in Year 1. 2. and 3? (5 points) c. What is the additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)? (5 points) d. If the project's cost of capital is 10%, should the machine be purchased (Using NPV, IRR, MIRR, and PI to analyze the project)? (5 points)

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