21-24 New equipment purchase, income taxes. National College Publishing, Inc., is considering the pur- hase of PR2020, a new printing machine, with an estimated useful life of 4 years. It estimates pretax cash lows for the machine as shown on page 752, with no anticipated change in working capital. National has a 15 after-tax required rate of return, and its income tax rate is 40%. Assume depreciation is calculated on a Grade Assist www. imated terminal disposal straight-line basis for tax purposes using the initial machine investment and estimated term value of the machine. Assume all cash flows occur at year-end except for initial investment am B C D E F Relevant Cash Flows at End of Each Year 0 1 2 3 $(220,000) 3 Initial machine investment Annual cash flow from operations 4 (excluding the depreciation effect) 5 Cash flow from terminal disposal of machine $90,000 $90,000 $90,000 $90.000 $20,000 If you want to use Excel to solve this exercise, go to the Excel Lab at www.prenhall.com/horngren/cost128 and download the template for Exercise 21-24. 1. Calculate (a) net present value, (b) payback period, and (c) internal rate of return. 2. Compare and contrast the capital budgeting methods in requirement 1. Required