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please explain Example A machine shop is evaluating the purchase of a new milling machine with a price of $150,000. In order to use this
please explain Example A machine shop is evaluating the purchase of a new milling machine with a price of $150,000. In order to use this machine, some customizations are necessary, which amount to $12,000. The milling machine has an estimated salvage value of $45,000. This milling machine will generate additional revenues of $175,000. The machine requires an operator with a yearly salary of $60,000, annual material expenses of $20,000, and an annual overhead of $10,000. It also requires an investment in working capital of $25,000 which will be recovered in full at the end of year 5. This machine falls into the MACRS seven-year class. Determine the year-by-year after-tax net cash flow for the project at a 21% marginal tax rate. Determine also the net present worth of the project at the company's MARR of 15% (after tax)
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