For each 3 companies find

a: Present Value of cash inflows

b: Present Value of cash outflows

The hurdle rate is 10%

Cost of New Machine $4,500,000 $4,600,000 $4,700,000 Estimated Useful Life 9 Years 9 Years 9 years Operating Costs each year $50,000 $50,000 $40,000 Warranty covers years 1-4 Maintenance Years 5-10 $15,000 $35,000 $15,000 Training for employees $25,000 $45,000 $35,000 Expected revenues generated years 1-3 $800,000 $700,000 $800,000 Expected revenues generated years 4-6 $ $600,000 $600,000 $700,000 Expected revenues generated years 7-10 $400,000 $500,000 $600,000 Estimated Salvage Value $50,000 $10,000 $25,000 Use straight-line depreciation to include tax savings from depreciation Tax rate 20%