#10

Kiara, Inc, is considering the purchase of a machine that would cost $850.000 and would last for 12 years, at the end of which, the machine would have a salvage value of $7,500. The machine would reduce labor and other costs by $130,000 per year, while adding $70,800 in depreciation expense, Additional working capital of $45,000 would be needed immediately, all of which would be recovered at the end of 12 years. The company requires a minimum pretax retum of 11% on all investment projects: Routared: Determine the net present value of the project. Show your work! TABLE 3 Present Value at t TABLE 4 Present Value of an Annuity of 1