Should Patriot buy the new machine? Ignoring the effects of the time value of money, what is the net cash flow resulting from the acquisition of the new machine?

a. Yes, $32,500

b. No, $32,500

c. Yes, $45,000

d. No, $45,000

How would net cash flow from the acquisition of the new machine change if:

a. Be Higher

b. Be Lower

c. Not Change

Patriot Industries Inc. is evaluating whether to sell an old machine and purchase a new machine: Acquisition cost Useful life Remaining useful life Current trade-in value Salvage after use Annual operating costs Defect rate per year Old Machine $180,000 5 years 3 years $80,000 $5,000 $55,000 New Machine $200,000 3 years 3 years NA $15,000 $15,000 1% 3% Annual production for both machines is 250,000 units. Rework costs are $1.50 per unit. Be Cash flow would: Be Higher Not Change Lower The acquisition cost of the old machine is $200,000 (instead of $180,000)