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Madison Manufacturing is considering a new machine that costs 5350,000 and would reduce pre-tax manufacturing costs by 5110 ,000 annually. Madison would use the 3

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Madison Manufacturing is considering a new machine that costs 5350,000 and would reduce pre-tax manufacturing costs by 5110 ,000 annually. Madison would use the 3 -year macrs method to depreclate the machine, and mansgement thinks the machine would have a value of $33,000 at the end of its 5 -year operating life. The applicable depreciation rates are 33.33%,44.45%,14.81%, and 7.41%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5 -year life. Madisan's marginal tax rate is 25%, and a 13% cost of capital is appropriate for the project. a. Calculare the project's NPV, IRR, MIRR, and payback. Do not round intermediate calculations, Round the monetary value to the nearest dolkar and percentage values and payteck to two decimal places. Negative values, if any, sheuld be indicated by a minus sign. NPV: 5 IRR: MiRR: Paybock: years b. Assume management is unsure about the $110,000 cost savings - this figure could devate by as much as plus or minus 20%. Do not round intermediate caiculations. Round your answers to the nearest dollar. Negative values, If any, should be indicated by a minus sign. Caiculate the NPV if cost savings value devate by plus 20%. 1 Calculate the RAPV if cast savings value deviate by minus 204 . 5 c. Suppose the cro wante you to do a scenario analysis with different values for the cost savings, the machine's salvage value, and the working capital (wC) requirement. She asks you to use the following probabilities and values in the scenario anolysis: \begin{tabular}{lcccr} Scenarlo & Probability & Cost Savings & Salvage Value & WC \\ \hline Worst case & 0.25 & $88,000 & $28,000 & 540,000 \\ Base case & 0.45 & 110,000 & 33,000 & 35,000 \\ Best case & 0.30 & 132,000 & 38,000 & 30,000 \end{tabular} Calculate the project's expected NPV, its standard deviation, and its coefficient of variation. Do not round intermediate calculations. Round the monetary values to the nearest dollar and a coefficent of variation to two decimal places. Negative values, if any, should be indicated by a minus siga. Thin project's expected NPV: s Standard devistion: 5 Coefficient of variation

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