ch 11 open ended assignment

A company is evalaating the purchase of a mackine to improve peoduct quality and octrat levela. The new machine would cost $811,000 and would be dejeciated for tax purposes asing the straigh-tine method ener as oveimated sixyear life io its expected salvage value of $50,000. The new mackise would roquere an addise of $45.000 to working capital at the beginning of the project, which will of course be returned to the firm at the cad of the peoject. The machine woeld increase the coenpany's atanal pec-tax cash receipts by 5247,000 Stuen therr carcat level. Cash operating eosts pertaining to the mackiene will be $17.000 per year, la addition, at the end of the 4ak year, a major ropair of the machine codking $30,000 (gre-tax) would be required. The compary has an overall cost of caital of 11%. and ia in the 35% marginal tax bracket. Your answers to this open-ended assignment should be placed in the space below this line