Longhorn Manufacturing is considering a new machine that costs $420,000 and would reduce pre-tax manufacturing costs by $125,000 annually. Longhorn would use the straight line deprecation method to depreciate the machine to zero over its operating life, and management thinks the machine would have a salvage value of $33,000 at the end of its 5 -year operating life. With the new machine, working capital would need increase by $35,000. Longhorn's marginal tax rate is 25%, and a 10% cost of capital is appropriate for the project