Basic calculator

A firm is evaluating the possible purchase of a $1,000 machine. The machine would be used in a 3-year project but would be depreciated as a 5-year MACRS asset. The salvage value of the machine would be $200 at the end of the project. The firm made the following estimates for each year: Fixed costs ($) 150 Units sold 60 Price per unit ($) 25 Variable cost per unit ($) 10 The estimates for fixed costs, units sold price per unit, and variable cost per unit are thought to be accurate to within plus minus 20%. The firm has other profitable opportunities sufficient to cover any losses. The tax rate is 25%. The discount rate Find the net present value of the project in the best-case scenario