1. Using an NPV analysis, advise Davidson as to whether or not Magic should purchase the new Delta finishing machine. The company tax rate applicable to Magic is 30 percent. While Davidson has not calculated his own cost of capital, his colleague with a similar business about 200 kilometers away advises that his cost of capital is 11 percent.

Question 3:Conduct the following sensitivity analysis: Change the discount rate to 12% Change the Year 5 selling price of the Delta to $80,000 Change the maintenance costs for the Delta: Year 1 costs are $1,000, increasing by $1,000 each year. Change all of the above factors together.\

I have the answer for Question 1. How is the tax savings/payments calculated? I need to understand this so that I can change this chart for question 3? Thank you.