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Lucas Company is considering investing in a new machine. The machine costs $14,000 and has an economic life of four years. The machine will generate cash flows of $4.000 (cash revenues less cash expenses) each year. All cash flows, except for the initial investment, are realized at the end of the year. The investment in the machine will be made at the beginning of the first year. Lucas is not subject to any taxes and, for financial accounting purposes, will depreciate the machine using straight-line depreciation over four years. Lucas uses a 8 percent cost of capital when evaluating investments. Use Exhibit A.9. Required: a. Calculate the accounting income for the total over four years. b. Compute the NPV of the cash flows over four years. (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar amount.) $ a. Accounting income b. Net present value 2.000 Square Manufacturing is considering investing in a robotics manufacturing line. Installation of the line will cost an estimated $10.2 million. This amount must be paid immediately even though construction will take three years to complete (years 0, 1 and 2). Year 3 will be spent testing the production line and, hence, it will not yield any positive cash flows. If the operation is very successful, the company can expect after-tax cash savings of $7.2 million per year in each of years 4 through 7. After reviewing the use of these systems with the management of other companies, Square's controller has concluded that the operation will most probably result in annual savings of $5.4 million per year for each of years 4 through 7. However, it is entirely possible that the savings could be as low as $3.0 million per year for each of years 4 through 7. The company uses a 16 percent discount rate. Use Exhibit A.8. Required: Compute the NPV under the three scenarios. (Round PV factor to 3 decimal places. Enter your answers in thousands of dollars. Negative amounts should be indicated by a minus sign.) Best Case Expected Worst Case Net present value