Stanley Corp is considering the purchase of equipment that is expected to cost $500,000 to purchase. It will have to invest an additional $60,000 to have the equipment shipped, modified, and installed. Further, the new equipment will require an initial investment in net working capital (additional raw material inventory, spare parts inventory, and additional accounts receivable) to the extent of $24,000. If purchased, this equipment will be fully depreciated for tax purposes over an eight-year period. Equal amounts of depreciation per year will be recognized. However, Stanley Corp expects to use the equipment for six (6) years. It projects that at the end of those 6 years, the equipment can be sold off for $180,000. Each year that the equipment is in service, Stanley Corp expects its sales revenue to be higher to the extent of $195,000. Additional operating costs (not including depreciation) is expected to be $25,000. Stanley faces a marginal tax rate of 30%. Stanley Corps weighted average cost of capital (WACC) is estimated to be 12%.

For the project being considered by Stanley Corp, what is the expected cash flow at the end of Year 6?

What is the expected gain from the sale of the equipment at the end of the 6 years?

Find the total present value of the cash flows for Years 1 through 6.

The net present value of this equipment or project is?

The IRR of this project or equipment is?