A machine can be purchased for $10,500 including transportation charges, but installation costs will require $1,500 more. The machine is expected to last four years and produce annual cash revenues of $6,000. Annual cash-operating expenses are expected to be $2,000, with depreciation of $3,000 per year. The firm has a 30 percent tax rate.

a.) Determine the relevant after-tax cash flows and prepare a cash-flow schedule.

b.)Calculate the payback period for the machine.

c.) If the project's cost of capital is 10%, would you recommend buying the machine?

d.) Estimate the internal rate of return for the machine.