Homework Problem A Amish Electric Company Heinz, the Amish Electrical Generation Manager, wants the colony to invest in a new machines, and allow the men to catch Monday Night Football. The new generator will cost generator that will reduce costs, be capable of meeting the electrical needs of their milking $950. Otto, the engineer has come up with savings estimates by year. They are listed in the analysis format below. This project will impact Accounts Receivable and Accounts Payable. The expected balances for these accounts are below. Depreciation expense will be $100 per year. The AEC's cost of capital is 16%. The tax rate is 25%. Calculate the NPV, and IRR for the new generator. Then make a recommendation to the Amish on whether he should make this investment or not. SHOW YOUR WORK. Yr. O 95 Yr. 1 140 Yr. 2 250 Yr. 3 250 Yr.4 95 Accounts Receivable 50 75 90 95 Accounts Payable 50 Yr. O (950) Yr. 1 250 Yr. 2 525 Yr. 3 600 Yr.4 600 Cost/Savings Depreciation Operation Profit Taxes Net Income Add Back Depreciation Change in A/R Change in A/P Total Cash Flow