Discount rate = 10%

International Textiles is a firm that manufactures industrial fabrics. International is planning to buy a new knitting machine. This machine is expected to generate additional S50,000 revenue a year and has an expected life of 5 years. The cost of the knitting machine is $100,000 and it will be depreciated using straight-line method. The installation cost of the machine is $10,000 and the increase in working capital is S15,000. This machine is expected to be sold at the end of 5 years for $8,000. The marginal tax rate of the firm is 34%. Find the NPV of the project. 1