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You need to evaluate the purchase of a new molding machine. The equipment s basic price is $ 8 4 , 5 7 2 ,

You need to evaluate the purchase of a new molding machine. The equipments basic price is $84,572, and it would cost another $9,397 to modify it for special use by your firm. The molding machine, which falls into the MACRS 3-year class, would be sold after 3 years for $33,829. The MACRS rates for the first three years are 0.3333,0.4445, and 0.1481. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,973. The machine would have no effect on revenues, but it is expected to save the firm $36,565 per year in before-tax operating costs, mainly labor. The firms marginal federal-plus-state tax rate is 21.0% and its cost of capital is 14.0%. How much is the year 2 NOPAT for this project?
($5,234)
($5,663)
($4,111)
($3,477)
($5,057)

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