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Question 5 8 pts A&L Corporation is considering buying a new machine that costs $120,000. The machine requires $6,000 in setup costs that are expensed
Question 5 8 pts A&L Corporation is considering buying a new machine that costs $120,000. The machine requires $6,000 in setup costs that are expensed immediately and $16,000 in additional working capital. The machine's useful life is 10 years, after which is can be sold for a salvage value of $30,000. A&L uses straight-line depreciation, and the machine will be depreciated to a book value of zero on a six-year basis. A&L has a tax rate of 40% and the project's cost of capital is 12%. The machine is expected to increase revenues minus expenses by $60,000 per year. What is the net cash flow in Year O? (Round your answer to the nearest cent. Be sure to include all cash flows that occur in Year O, and an outflow should be entered as a negative number.) Question 6 8 pts A&L Corporation is considering buying a new machine that costs $120,000. The machine requires $6,000 in setup costs that are expensed immediately and $18,000 in additional working capital. The machine's useful life is 10 years, after which is can be sold for a salvage value of $30,000. A&L uses straight-line depreciation, and the machine will be depreciated to a book value of zero on a six-year basis. A&L has a tax rate of 40% and the project's cost of capital is 12%. The machine is expected to increase revenues minus expenses by $60,000 per year. What is the present value of the net cash flow occurring in Year 10? (Round your answer to the nearest cent. An outflow should be entered as a negative number.)
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