$($Calculating project cash flows and NPV$)$ The Guo Chemical Corporation is considering the purchase of a chemical

analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of

$$60,000$ per year. The machine has a purchase price of $$200,000,$ and it would cost an additional $$5,000$ after tax to

install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $$10,000.$

This machine has an expected life of $10$ years, after which time it will have no salvage value. Also, assume

simplified straight$-$line depreciation, that this machine is being depreciated down to zero, a $37$ percent marginal tax rate,

and a required rate of return of $12$ percent.

a$.$ What is the initial outlay associated with this project?

b$.$ What are the annual after$-$tax cash flows associated with this project for years $1$ through $9?$

c$.$ What is the terminal cash flow in year $10($that is$,$ the annual after$-$tax cash flow in year $10$ plus any additional cash

flow associated with termination of the project$)?$

d$.$ Should this machine be purchased?

a$.$ The initial cash outlay associated with this project is $$215,000.($Round to the nearest dollar.$)$