Your manufacturing company, Widget World LLC, is considering purchasing a new machine that costs $10 million. It will cost $50,000 to transport and install the machine. The machine will be fully depreciated over five years and have no salvage value. Your company uses straight-line depreciation for accounting purposes.

The acquisition of this machine is expected to generate incremental revenues of $4 million per year for five years along with incremental costs of $1.2 million per year. The machine is expected to last only five years, after which it is expected to have no value. Widget World's marginal tax rate is 35%.

a) What are the incremental earnings for years 0-5 associated with purchasing this new machine?

Year 0	Year 1	Year 2	Year 3	Year 4	Year 5

b) Assuming there is no additional investment in Net Working Capital required, what are the incremental cash flows for years 0-5 associated with purchasing this new machine?

Year 0	Year 1	Year 2	Year 3	Year 4	Year 5

c) What is the NPV of the decision to invest in this machine assuming Widget World's cost of capital is 7%?

NPV=