1. what is year 1 and 2 OCF?

2. what is the ATSV at the end of year 3?

whats the irr?

The Brauer Company is evaluating the proposed acquisition of a new milling machine with a base price of $115,000, plus customization $15,000 fee for special use by the firm. The machine falls into the MACRS 3 year class life (33, 45, 15,7%), and it would be sold after 3 years for $75,000. The machine would require an increase in inventory of $8,000 with a simultaneous increase in accounts payable of $3,000. The machine will have no effect on revenues but is expected to reduce operating costs by $48,000 per year. Assume the cost of capital is 12% and the marginal tax rate is 40%