QUESTION 4

1. Ella Inc. is considering purchasing a new milling machine. The new machine costs $133,143, plus installation fees of $15,193 and will generate revenue of $3,458,356 per year and cost of good sold of $1,010,884 over its 5-year life. The machine will be depreciated on a straight-line basis over its 5-year life to an estimated salvage value of 0. Mystics marginal tax rate is 0%. Mystic will require $23,868 in NWC if the machine is purchased. Determine the annual operating cash flow in if the machine is purchased. round your answer to two decimals

10 points

QUESTION 5

1. You have been offered a unique investment opportunity. If you invest $875 today, you will receive $319 one year from now, $798 two years from now, and $1,937 three years from now. What is the NPV of the opportunity if the cost of capital is 8% per year?