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please type out answers. do parts b,c,d thank you (New project analysis) Garcia's Truckin' inc. is considering the purchase of a new production machine for
please type out answers. do parts b,c,d
(New project analysis) Garcia's Truckin' inc. is considering the purchase of a new production machine for $300,000. The purchase of thits machine we result in an increase in earnings before interest and taxes of $50,000 per yeat. To operate the machine properly, workers would have to go through a brief training session that would cost $7,000 after taxes. it would cost $8,000 to install the machine properfy. Also, because this machine is extremely efficient, its purchase would necossitate an increase in inventory of 525 , 000. This machine has an expected iffe of 10 years, after which it will have no saivage value. Finally, to purchase the new machine, it appears that the firm would have fo borrow 5 to0,000 at 12 percent interest from is local bark, resulting in additionat inserest payments of $12,000 per year. Assume simplifed straight-line depreciation and that the machine is being depreciated down to zero, a 33 percent marginal tax rate, and a required rate of return of 11 percent. a. What is the initial outlay associated with this project? b. What are the annual atier-tax cash flows associated with this project for years 1 through 9 ? c. What is the terminal cash fow in year 10 (what is the annual after-tax cash fow in year 10 plus any additional cash fows associated with the termination of the profectr? d. Should the machine be purchased? a. What is the initial outiay associated with this project? (Round to the nearest dollas.) b. What are the annual afier-tax cash fows associated with this project for years 1 through 9 (note that the cash fows for years 1 through 9 are equal thank you
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