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(Calculating project cath fows and NPV) Woirs Trucking. Ine is considering the purchase of a new production machine for $80,000. The purchate of this new

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(Calculating project cath fows and NPV) Woirs Trucking. Ine is considering the purchase of a new production machine for $80,000. The purchate of this new machine wil resul in an ihcrease in eamings before interest and tsues of $21,000 per year. To operale this mochine properly, workers would have to go through a briat training session that aculd cost $5,500 after tax. In additom, in would cost $3.500 after tax to install this machine comectly. Aso, becavse this machine is exdremely eficient, its purchase would necesutase an inceose in invertory of $23, 000. This machine has an expected life of 10 years, ater which it wal have no salvage value. Finally, to purchase the new machine, it appeans that the firm would have to borrow $70,000 at 10 percent interest from its local bark, resisting in adsbonal interest payments of $7,000 per year. Assume simplifed straight-line depreciation, that this machine is being doprecialed down to zero, a 32 percent maginal tax rate, and a required rate of retum of 9 pereent. a. What is the infital ouliay aseociated with this project? b. What are the annual aher-tax cash fows associated with this propect foc yeare 1 theough 9 ? c. What is the terminal cast fow in year 10 (that is, the annual after tax cash fow in year 10 plos any asditional cash fooss associatod with lerminution of the project? d. 5 hould this machine be purchased? a. The nial cash ouftay associated with this propect is! (Round is the nearest dollar ) b. The annual afientex cash foss ascociated whe tha propect for years 1 though 0 are 1 (pound to twe nearest doliar.) a. O.ven the inlormason, the machine (Select the best choice belowe) A. thould be purchased because the NPY a $46.47, making a a worthwile investment tor the cormpary B. should not be purchasod because the NPV is $46,477. making it an unacceptable incestmant for the corpany

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