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XYZ Company is considering the purchase of a new machine. The machine will cost $215,000 and is expected to last 10 years. However, the machine

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XYZ Company is considering the purchase of a new machine. The machine will cost $215,000 and is expected to last 10 years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year six. In addition, purchasing this machine would require an immediate investment of $35,000 in working capital which would be released for investment elsewhere at the end of the 10 years. The machine is expected to have a $15,000 salvage value at the end of 10 years. The machine will be used to generate net cash inflows of $49,000 per year in each of the 10 years. XYZ Company has a cost of capital of 8% and an income tax rate of 40%. Calculate the net present value (NPV) of this machine. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234). You will need to use the present value table factors posted in carmen to answer this question. To access these factors, click modules and then scroll to weeks 13 and 14. Click on the link labeled present value table factors. No credit will be awarded for this question using a means other than these posted table factors to answer this question. 64,019 XYZ Company is considering the purchase of a new machine. The machine will cost $215,000 and is expected to last 10 years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year six. In addition, purchasing this machine would require an immediate investment of $35,000 in working capital which would be released for investment elsewhere at the end of the 10 years. The machine is expected to have a $15,000 salvage value at the end of 10 years. The machine will be used to generate net cash inflows of $49,000 per year in each of the 10 years. XYZ Company has a cost of capital of 8% and an income tax rate of 40%. Calculate the net present value (NPV) of this machine. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234). You will need to use the present value table factors posted in carmen to answer this question. To access these factors, click modules and then scroll to weeks 13 and 14. Click on the link labeled present value table factors. No credit will be awarded for this question using a means other than these posted table factors to answer this question. 64,019

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