The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $70,000 per year. The machine has a purchase price of $250,000, and it will cost an additional $10,000 to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $15,000. This machine has an expected life of 10 years, after which time it will have no salvage value. Assume the equipment will be equally depreciated (straight-line method) over the 10 years of use. The company has a 34% marginal tax rate, and a required rate of return of 15%.

What is the initial cash outlay associated with this project (FCF in Year 0)?

What are the annual net cash flows associated with this project for Years 1 through 9 (FCF in Year 1 - 9)?

What is the terminal cash flow in year 10 (FCF in Year 10)?

Determine the project's NPV.