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It costs $84,000 to purchase and install a new machine that will let the company cut costs for 8 years. The machine will be
It costs $84,000 to purchase and install a new machine that will let the company cut costs for 8 years. The machine will be depreciated linearly to zero over 10 years, and can be sold for $12,600 after 8 years. Every year starting right now, the project requires an investment of $5,000 for net working capital. After 8 years, the stock of net working capital will be recouped. The marginal tax rate is 35% and the required return is 8%. BAttempt 1/6 for 10 pts. Part 1 What is the after-tax salvage value of the machine in year 8? 0+ decimals Submit Part 2 Attempt 1/6 for 10 pts. What is the present value of operating cash flows (EBIT(1-t) + Dep.) to break even? 0+ decimals Submit I BAttempt 1/6 for 10 pts. Part 3 At what level of annual operating cash flows (OCF) does the project break even? 0+ decimals Submit Attempt 1/6 for 10 pts. Part 4 At what level of annual cost savings does the project break even?
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