Math of Finance

Subject: Depreciation, Cash Flows, Net Present Value, and Internal rate of Return - Do not use Excel use the proper formula attached below instead.

A company is considering the purchase of a machine which costs $62,000, has an expected life four years and has a crap value of $15,000. The machine is expected to increase revenue by $16,000 each year and requires a maintenance cost of $2,000 per year. Assuming tax rate of 38%, compute the net value for this investment using an interest rate of 5% and the double declining balance method for two years followed by the straight-line method.