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The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine

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The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30.000 and the machine will be depreciated straight line over its three-year life to a residual value of $0 The cane manufacturing machine will result in sales of 2000 canes in year 1. Sales are estimated to grow by 10% per year each year through year 3. The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant. The canes have a cost per unit to manufacture of 59 each Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts. It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash, 4% of its annual sales in accounts receivable 9% of its annual sales in inventory and 5% of its annual sales in accounts payable. The firm has a 20% tax rate and has a cost of capital of 10% The depreciation tax shield for the Slyphean Corporation's project in the first year is closest to O A $1,800 OB $1600 OC. $2,000 $6,000

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