Johnson company wants to purchase a machine with the initrial cost of $52,500. it is estimated that the machine will increase revenue by $10,000 annually, the machine has a 10 year life. There is a straight line depreciation, and there will be a 20% tax rate.

Find the additional revenues after tax.

Find the annual depreciation expense

Find the tax savings from depreciation

Assuming a 10% minimum acceptable return, compute the after-tax net present value.

Is this a good investment?