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(Now projoct analysis) Raymobile Motors is considering the purchase of a new production machine for 5600,000 . The purchase of this machine will result in

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(Now projoct analysis) Raymobile Motors is considering the purchase of a new production machine for 5600,000 . The purchase of this machine will result in an increase in 6amings befo interest and taxes of $150,000 per year. To operate this machine properly, workers would have to go through a brief training session that would cost $30,000 atter taxes. It would cost $5.000 to instalt the machine properly. Also, because the machine is extremely efficlent, its purchase would necessitate an increase in imventory of 550,000 . This machine has an expect life of 10 years, after which it will have no salvage value. Assume simplified straight-line depreciation and that this machine is being depreciated down to zero, a 31 percent marginal tax. rate, and a required rate of return of 18 percent. a. What is the initial outily associated with this project? b. What are the annual after-tax cash flows assoclated with this project for yoars 1 through 9 ? 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 lermination of the project)? d. Should the machine be purchased? a. What is the initial outlay assoclated with this project? (Round to the nearest dollag) b. What are the annual after-tax cash fows associated with this project for years 1 through 9 (note that the cash flows for years 4 through 9 are equal)? (Round to the nearest dollar) c. What is the terminal cash flow in year 10 (what is the annual atler-tax cash flow in year 10 plus any adefional cash flows associated with tho termination of the project)? (Round to the nearest dollar.) d. What is the projects NPV given a tequired rate of retum of 18 percent? (Round to the nearest doliar) Should the machine be purchased? (Select the best choice below.) A. Yes. Tho project' NPV is positve. B. No. The project's NPV is negathe

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