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Daily Enterprises is purchasing a $10.59 million machine. It will cost $63,833.00 to transport and install...

Daily Enterprises is purchasing a $10.59 million machine. It will cost $63,833.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.20 million per year along with incremental costs of $1.16 million per year. Daily’s marginal tax rate is 37.00%. The cost of capital for the firm is 10.00%. (answer in dollars..so convert millions to dollars) What is the year 0 cash flow for the project?

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Answer #1
Purchase cost 10,590,000
transport and install the machine 63,833
Cash flow at year 0 10,653,833   (since it is a cash outflow it will be denoted as -10,653,833]

Cash flow at year 0 = -10,653,833

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