The machine falls under the 3-year MACRS class. Net working capital requirements are expected to decrease by $15,000 annually over the course of the machine's life. Mr. N. Hamid, the owner, forecasts that the net operating revenues after accounting for all the operating expenses will increase by $80,000 for each of the next 4 years and the machine will then be sold (scrapped) for $22,500 at the end of the fourth year, when the project ends. Being a textile industry focused company, Hamid Fabrics is in the 32.5% tax bracket, but is tax exempt for the first two years of the project. The applicable discount rate currently is 16%. a) Calculate the initial cost of the project. b) Calculate the Incremental cash flows for years 1,2,3 and 4 c) Calculate the Net Terminal Cash Flow at the end of year 4 d) Finally, calculate the Net Present Value for the project, and based on the value should you accept the project or reject it? The machine falls under the 3-year MACRS class. Net working capital requirements are expected to decrease by $15,000 annually over the course of the machine's life. Mr. N. Hamid, the owner, forecasts that the net operating revenues after accounting for all the operating expenses will increase by $80,000 for each of the next 4 years and the machine will then be sold (scrapped) for $22,500 at the end of the fourth year, when the project ends. Being a textile industry focused company, Hamid Fabrics is in the 32.5% tax bracket, but is tax exempt for the first two years of the project. The applicable discount rate currently is 16%. a) Calculate the initial cost of the project. b) Calculate the Incremental cash flows for years 1,2,3 and 4 c) Calculate the Net Terminal Cash Flow at the end of year 4 d) Finally, calculate the Net Present Value for the project, and based on the value should you accept the project or reject it