The Dawn Co$.$ is considering the purchase of new machines in order to expand their business. The machines have a useful life of five years. The required rate of return for the expansion is $17\%.$ The company$$s tax rate is $40\%.$

Purchase price of the new machines $$450,000$

Installation charges $ $50,000$

Increased revenues from expansion $$200,000/$year before taxes

Salvage value at the end of the fifth year $$175,000$

MACRS $5$ year $(20\%,32\%,19\mathrm{.}2\%,11\mathrm{.}5\%,11\mathrm{.}5\%,5\mathrm{.}8\%)$

What is the cash flow at t$=0?$

What are the depreciation deductions for the machine for each year?

What is the book value of the machines at the end of year five?

What is the taxable gain$/$loss from the sale of the machines at the end of the useful life if they are sold for the estimated salvage value?

What is the tax on the sale of the machines at the end of year $5?$

What is the terminal year non$-$operating cash flow $($proceeds from the sale$)?$

What are the incremental cash flows for each year, CF$0$ through CF$5?$

What is the payback period?

What is the Net Present Value?

What is the Internal Rate of Return?