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5. Windsor Corporation is considering an investment which will require the purchase of a machine. The machine costs $800,000, has a class life of 5

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5. Windsor Corporation is considering an investment which will require the purchase of a machine. The machine costs $800,000, has a class life of 5 vears, and will be depreciated using simplified straight-line depreciation. The firm's tax rate is 21%. The incremental cash inflows expected during the 5 year life of the profect are 5240,000 per year, und cash expenses are $80,000 per year, In addition, the new machine will reduce defects by $15,000 per year. The new machine wili require a one-time increase in net working capital of $25.000 at the time of installation. At the end of 5 years, the machine will be worthless, and the firm will not replace it. Calculate the annual cash flow resulting from this project. a) $171,850 d) $138.250 b) $11.850 c) $298,250 c) $141,850

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