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Saddleback Industries is considering the purchase of machinery that will allow them to manufacture parts that a new customers needs. The cost of the machine

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Saddleback Industries is considering the purchase of machinery that will allow them to manufacture parts that a new customers needs. The cost of the machine is $400,000 and it will cost another $100,000 to get it installed and programmed. The machine will be depreciated straight-line to a zero salvage value over its five-year useful life. It is expected to be worth $50,000 at the end of five years. The machine should allow the firm to increase its income by $225,000 per year, but expenses will increase by $35,000. The firm's tax rate is 40% and the required rate of return on this project is 12%. What is the NPV ofthe project? $72,158.34 -$56,223.90 $45,387.11 $536.28

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