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Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $160,000 that would save it $35,000 per year in production costs. The savings
Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $160,000 that would save it $35,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The machine would require an additional $8,000 in net working capital. The appropriate cost of capital for this project is 12% and the company's tax rate is 35%. Part 1 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 0 ? Choose the right sign. Part 2 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 1 ? What is the cash flow from assets in year 2? Part 4 What is the cash flow from assets in year 3 ? Hint: add the recovery of net working capital. Part 5 What is the NPV of this project
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