Question: SilverCAM is considering purchasing a 5 Axis CNC machine worth TL 950,000 to expand the facility. The income of each transaction made on this machine

SilverCAM is considering purchasing a 5 Axis CNC machine worth TL 950,000 to expand the facility. The income of each transaction made on this machine is 165 TL/transaction. The capacity of the machine is 10,000 operations/year, but it is planned to operate at 80% capacity. According to the agreement made, the annual maintenance-repair cost of the machine is 65,000 TL. When the machine is running, 45 TL electricity, 35 TL labor, 25 TL materials and 5 TL other costs per transaction occur. The normal depreciation method is applied in the company, the depreciation period is 7 years and the depreciation base is the purchase price. At the end of seven years, the second hand value of the machine is 12.5% of the purchase price. In addition, the business needs a working capital of 90,000 TL. Where this business is located, the tax rate is 22%, and the cost of capital is 12.5%.

What is the after-tax NPV of this investment by SilverCAM?

What is the IRR of this investment by SilverCAM?

What is the PP (payback period) of this investment by SilverCAM?

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