2) determine the expected income and net cash flow for each year of this machines life

5) compute the net present value of this machines using a discount rate of 7% and assuming that cash flow occur at each year-end

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $480,000 cost with an expected four-year life and a $20,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Expected annual sales of new product Expected annual costs of new product $1,840,000 Direct materials Direct labor Overhead (excluding straight-line depreciation on new machine) Selling and administrative expenses Income taxes 480,000 672,000 336,000 160,000 308 Required 1 Required Required 3 Required 4 Required 5 Determine expected net income and net cash flow for each year of this machine's life. Expected Net Income Revenues Expenses ncome before taxes Expected Net Cash Flow compute the net present value for this machine using a discount rate of 7% and assuming that cash flows occur at each year- end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) (Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign.) Chart Values are Based on: Select Chart Cash Flow Annual cash flow Residual value Amount x PV Factor = Present Value 0.00 0.00 Net present value