CH12 (Questions 16-20) A company is purchasing a new machine which will cost $120,000 with $20,000 in shipping and additional set up and installation costs of $12,000. An additional $6,000 in Net Working Capital will be required. Project life is five (5) years. The project will increase revenues by $90,000 each year and operating costs will increase by $32,000 annually. The machine has a class life of seven (7) years and will be depreciated using the straight line method. The company will sell the machinery for $50,000 at the end of five years. The firm's WACC is 12% and the marginal tax rate is 34%. 16. Calculate the Depreciable Assett. a) $135,000 b) $147,000 c) $158,000 (d) $152,000 17. Compute the Initial outlay for the project a) $135,000 b) $147,000 (c) $158,000 d) $153,000 18. Compute the annual cash flows for the first year of the project. a) $24,420 (b) $45,663 c) $48,276 d) $46,345 19. Compute the nonoperational cash flows from the sale of the machine in year five. a) $48,276 b) $53,766 c) $18,418 d) $56,480 O. Compute the total (terminal) cash flow for year five of the project (operational and nonoperational flows). a) 599,429 b) $72,546 c) $98,700 d) $109,351