Karen is considering a new part-time business venture where she would monogram linens and other items. To do this, she would need to upgrade her current sewing machine. Here is what she quickly threw together as an estimate: Cost to upgrade machine today Annual sales potential COGS Operating expenses in year 1 $840 (purchase price of $1,020 less $180 trade-in value of current machine) $5,700 per year 30 % of sales $1,030 (for marketing efforts; no new operating expenses thereafter) She plans to use the sewing machine only for business purposes and expects it to have a 4-year useful life, at which time it will have a salvage value of $200. Click here to view the factor table Outline the appropriate cash flows, timing, adjustment for taxes, and PV factor for each component of this business venture, assuming Karen reaches her estimates as listed above for 4 years. Assume an 8% discount rate and an applicable tax rate of 20%. (Round present value factor answers to 5 decimal places, e.g. 1.25124. Round tax rate and present values to 2 decimal places, e.g. 0.15 or 125.25. Enter negative amounts using either a negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).) Item Cash Flow Asset $ investment Annual gross margin Depreciation tax shield Operating cash outflow Salvage value When > Tax Rate PV Factor Outline the appropriate cash flows, timing, adjustment for taxes, and PV factor for each component of this business venture, assuming Karen reaches her estimates as listed above for 4 years. Assume an 8% discount rate and an applicable tax rate of 20%. (Round present value factor answers to 5 decimal places, e.g. 1.25124. Round tax rate and present values to 2 decimal places, e.g. 0.15 or 125.25. Enter negative amounts using either a negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).) low When Tax Rate PV Factor $ Present Value (b) Determine the NPV of this 4-year business venture. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places e.g. 5,125.36. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) NPV $ (c2) If she ends up making only $1,910 in sales in each of the 4 years, is it worth it for her to stay in business? (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places e.g. 5,125.36. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) NPV $ It worth to stay in business. Outline the appropriate cash flows, timing, adjustment for taxes, and PV factor for each component of this business venture, assuming Karen reaches her estimates as listed above for 4 years. Assume an 8% discount rate and an applicable tax rate of 20%. (Round present value factor answers to 5 decimal places, e.g. 1.25124. Round tax rate and present values to 2 decimal places, e.g. 0.15 or 125.25. Enter negative amounts using either a negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).) Cash Flow When Year 0 Year 1 Year 2 Year 3 Year 4 Years 1-4 Tax Rate PV Factor +A $ Present