You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below. - The project life is 3 years - The machine costs $180,000 - You will pay cash for half of this at time 0, and will finance (get a loan) for the remaining half at 10% APR compounded annually over 3 years. - The machine will be depreciated using a 5 year MACRS approach. - Annual O\&M costs of the machine are $25,000. - Annual labor savings (revenues) are $100,000. - Salvage Value at the end of year 3 will be $50,000. - Working Capital requirement is initially $30,000. Any investment in Working Capital will be recovered at the end of the project. - Assume an income tax rate and gains tax rate of 25%. - Your MARR is 15%. Part (a) (30 points total for part (a)). Fill in the Income and Cash Flow tables on the next page to find the annual after-tax cash flows. Cells outlined in BOLD are grading checkpoints. These cells are the "Net income" and "Depreciation" rows in the Cash Flow Statement (3 points each for years 1-3), and the "NET CASH FLOW" row (3 points each for years 0-3). Part (b) (10 points total for part (b)). Find the Net Present Worth (NPW) of this project. Provide recommendation and justification for accepting or rejecting the project. Fill in the 2 blanks below, showing all work to justify your answers. Answers that are "correct" but are due to computational errors will receive no credit. You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below. - The project life is 3 years - The machine costs $180,000 - You will pay cash for half of this at time 0, and will finance (get a loan) for the remaining half at 10% APR compounded annually over 3 years. - The machine will be depreciated using a 5 year MACRS approach. - Annual O\&M costs of the machine are $25,000. - Annual labor savings (revenues) are $100,000. - Salvage Value at the end of year 3 will be $50,000. - Working Capital requirement is initially $30,000. Any investment in Working Capital will be recovered at the end of the project. - Assume an income tax rate and gains tax rate of 25%. - Your MARR is 15%. Part (a) (30 points total for part (a)). Fill in the Income and Cash Flow tables on the next page to find the annual after-tax cash flows. Cells outlined in BOLD are grading checkpoints. These cells are the "Net income" and "Depreciation" rows in the Cash Flow Statement (3 points each for years 1-3), and the "NET CASH FLOW" row (3 points each for years 0-3). Part (b) (10 points total for part (b)). Find the Net Present Worth (NPW) of this project. Provide recommendation and justification for accepting or rejecting the project. Fill in the 2 blanks below, showing all work to justify your answers. Answers that are "correct" but are due to computational errors will receive no credit