ABC Corp. is considering the purchase of another machine as an alternative to Project A. (YOU MUST COPY & PASTE THE TABLE INTO YOUR ANSWERING BOX) Calculate the NOCFs for Project B. a The cost of the new machine is $210,000. 6. Delivery and Installation will cost $40,000 c. The company spent $60,000 building a new parking lot last year d. The project will require an immediate increase in working capital of $10,000; the working capital will be fully recaptured at the end of the life of the project. The project will increase annual revenues by $95,000 and annual operating costs by $35,000. f. The project has an estimated life of five years. 8 The machine will be 100% depreciated via simple straight-line depreciation to a book value of $0.00 i. The company is using SIMPLE straight line depreciation ii. However, similar machines outlive the IRS depreciation period and on average have a salvage value of $20,000 after 5 years of use. The company assumes the same for their machine, The Firm expects to sell their current old machine as scrap parts for $5,000 which has been fully depreciated to a book value of $0.00 1. Assume a 14% WACC and 35% marginal tax rate. 1. What is the initial outlay using the information above? (4 points) a Purchase Price b. Shipping and Installation Depreclable Machine Value d. Working Capital *After tax net from old machine Net Initial Outlay Nery Machine (4 Points) 2. Calculate the After Tax Net from the sale of the Old Machine to be replaced by the New Machine. (4 Points) E Book Value Original Cost Accumulated Depreciation Gain/Loss Sale Price Old Mach. Book Value Tax Rate Tax Effect Gain/Loss Tax Effect After Tax Net Sale Price Old Mach. (-/+)