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Week 12 Assignment 1. What is a sunk cost? Should it be included in the cash flow calculations? Why? 2. What is depreciation expense? Should it be included in the cash flow calculations? Why? 3. Mahya Corporation is considering the purchase of a high-speed lathe that has an invoice price of $300,000. The cost to ship he lathe to lylahya's factory is $50,000, and he existing facilities will require modifications hat are expected to cost $50,000. The machine will he depreciated on a straight-line basis oyer its useful life of 10 years, assuming no salyage yalue. Mahya Corporation is planning on paying for the lathe using a line of credit at the bank that has an interest rate of 0 percent per year. The lathe is expected to increase production and sales. Sales are expected to increase by $150,000 per year. $20,000 is needed for the additional networking capital. Expenses to operate the lathe are $25,000 per year. Mahya's marginal ax rate is 40%. a. Calculate the initial outlay required to fund his project. lo. Calculate the incremental after-tax cash low in year one of the project