Assume that you will buy and operate a piece of equipment. The machine costs $750,000. You estimate that the equipment will generate $175,000 revenue, each year for eight years. You also estimate that operating costs for the machine will be $35,000 each year for eight years. There will be a one-time repair cost at the end of year four, estimated at $100,000. The salvage value = $150,000. All estimates are in constant 2021 dollars. The inflation rate for revenues is estimated to be 2.5%. The inflation rate for operating costs and repairs is estimated to be 4.5%. You will depreciate the machine using the MACRS method, and the 7-year category. Assume that negative taxable amounts are allowed. Inflated values begin with period one. The federal tax rate = 21%, and the state tax rate = 7%. 1. Determine the after-tax cash flow, in actual $. 2. Determine the book value of the machine for each year. 3. Determine the NPW of the actual-dollar, after-tax cash flow, if the MARR = 10%. Taxable Cash Before Tax Cash Flow After Tax Cash Flow Revenues Actual $ Year Operating Costs Actual $ MACRS % Depreciation Amount (dt) Book Value Tax Flow Actual S Actual $ 0 NA NA NA NA NA NA 1 2 3 4 5 6 7 8 MACRS Table Year 3-Year 5-Year 7-Year 1 33.33 20 14.29 2 44.45 32 24.49 3 14.81 19.2 17.49 4 7.41 11.52 12.49 5 11.52 8.93 6 5.76 8.92 7 8.93 8 4.46