Question

PLEASE ANSWER ALL QUESTIONS B,C,D

ICIU Simar to) Question Help Calculating project cash flows and NPVThe Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine wilt in an increase in camings before terest and lanes of $60.000 per year. The machine has a purchase price of $100,000, and it would cost an tional $9,000 after tax to install this machine correctly. In addition to operatoris machine property Inventory must be increased by $18,000. This machine has an expected ife of 10 years after which time it will have no savage value A s sume simplified straine depreciation that this machine is being depreciated down to zero, a 30 percent marginal tax rate, and a required rate of return of 9 percent b. What are the multam chow e d with this project for years through 97 6. What is the terminal cash flow in year 10 (that is, the annual after lax cash flow in year 10 plus any additional cash flow associated with d. Should this machine be purchased mination of the project? . The sho w is pro 127000 Round lowest b. The annual for tax cash flows s e d with this project for years 1 ough we 06270 (Round nearest dollar Enter your answer in the answer box and then click Check Answer Check Answer remaining

Answer 1

1.
=100000+9000+18000=127000

2.
=90000*(1-30%)+(100000+9000)/10=73900

3.
=90000*(1-30%)+(100000+9000)/10+18000=91900

4.
=-(100000+9000+18000)+(90000*(1-30%)+(100000+9000)/10)/9%*(1-1/1.09^10)+18000/1.09^10=354868.298639773