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lew project analysis) The Chung Chemical Corporation is considering the purchase of a chemical analysis achine. Although the machine being considered will result in an

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lew project analysis) The Chung Chemical Corporation is considering the purchase of a chemical analysis achine. Although the machine being considered will result in an increase in earnings before interest and taxes of 34,000 per year, it has a purchase price of $140,000, and it would cost an additional $7,000 to properly install the achine. In addition, to properly operate the machine, inventory must be increased by $10,000. This machine has expected life of 10 years, after which it will have no salvage value. Also, assume simplified straight-line apreciation and that this machine is being depreciated down to zero, a 33 percent marginal tax rate, and a quired rate of return of 16 percent. What is the initial outlay associated with this project? What are the annual after-tax cash flows associated with this project for years 1 through 9 ? What is the terminal cash flow in year 10 (what is the annual after-tax cash flow in year 10 plus any additional ash flows associated with the termination of the project)? Should this machine be Durchased? b. What are the annual after-tax cash flows associated with this project for years 1 through 9 (note that the cash flows for years 1 through 9 are equal)? $ (Round to thel earest dollar.) c. What is the terminal cash flow in year 10 (what is the annual after-tax cash flow in year 10 plus any additional cash flows associated with the termination of the project)? \$ (Round to the hearest dollar.) d. What is the project's NPV given a required rate of return of 16 percent? \$ (Round to the nearest dollar.)

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