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Can you please fill out what is in the green Thank You STAMPING MACHINE PURCHASE RECOMMENDATION The CFO of Montag Metals is considering the purchase

Can you please fill out what is in the green
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STAMPING MACHINE PURCHASE RECOMMENDATION The CFO of Montag Metals is considering the purchase of a new stamping machine to support its sales growth. The firm has hired you to determine whether it will be a good idea to pursue this project. The new machine will allow the firm to increase annual revenues by $3,500,000 Annual cash costs will increase by $2,000,000. In addition, the firm will need to immediately increase inventory by $500,000. Accounts payable will partly offset this, increasing by S350,000. The new stamping machine costs $4,500,000 installed. It will be depreciated by MACRS method for 3-year property. The expected economic life of the machine is five years. At the end of five years the machine will likely be sold for about 20% of its initial cost The firm's tax rate is 21%. The CFO also asks you to prepare a report recommending whether the firm should go forward with the investment or not. In preparing your recommendation, you should create a spreadsheet (see template) to carefully detail the following calculations a) The initial investment in the project. (3 points) b) The operating cash flows over the project life. (12 points) c) The (non-operating) terminal cash flow for this project. (6 points) d) The project's internal rate of return (IRR) and its net present value (NPV) at the firm's cost of capital of 12%. Also, calculate the payback period. (8 points) e) Based on NPV and IRR, what would be your recommendation (4 points)

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