Progressive Ltd is planning to purchase a new machine with an estimated cost of $350,000. It will be depreciated using straight-line to zero method over a 5-year period. The additional annual revenues are $250,000 whereas the additional annual operating expenses are $90,000. An inventory investment of $85,000 is required during the life of the investment. The machine will be sold for $75,000 after 5 years. The corporate tax rate is 40% and the cost of capital is 10%. Compute the net cash flow for this project. How much is the project NPV?

Please type in words

Question 3B (3 marks) Progressive Ltd is planning to purchase a new machine with an estimated cost of $350,000. It will be depreciated using straight-line to zero method over a 5-year period. The additional annual revenues are $250,000 whereas the additional annual operating expenses are $90,000. An inventory investment of $85,000 is required during the life of the investment. The machine will be sold for $75,000 after 5 years. The corporate tax rate is 40% and the cost of capital is 10%. Compute the net cash flow for this project. How much is the project NPV