After tax salvage is 800,000

Use the following information to answer questions #1-3. Your company wants to bid on the sale of 10 customized machines per year for five years. The company ow land beside its current manufacturing facility that could be used for building the machines. The company this land S years ago at a cost of $200.000. Today, the land is valued at $300.000. In five years the aftertax value of the land will be $500.000. The project w depreciated estimated at $700.000. Variable cost per machine is S81.500. The project requires net working capital of $200,000The company has a 34% tax rte and desires a l 5% return on the project. ill need equipment which costs $1.6 million and will be straight-line to zero. The salvage value of the equipment is $800,000. Annual fixed costs are 1. What is the initial Time 0 cash flow? a. $1.72 million b. $1.90 million c. $2.10 million d. -$2 million e. $2.10 million 2. a. $388,652.24 b. $448,315.55 c. $374.157.78 d. $403,989.33 e. $513,102.75 What is the operating cash flow for each year, at which the NPV-0? What is the minimum price that the company should bid per single machine? $196,226 $186,459 $219,887 $204,469 $221,009 3. a. b. c. d. e. 4. a. b c. d. The payback period is less than the maximum acceptable period. e. The NPV is positive. If a project with conventional cash flows has an IRR less than the required return, then: The profitability index is less than 1. The discounted payback period is zero. The required return is zero