Zoomz Video wants to introduce a new product line but must buy the new machine to produce the product at a cost of $100,000. The machine will be depreciated straight line over its 5 year life to a $0 salvage value. The machine will be sold in year 5 for $500 in scrap metal

The new machine will produce 1,000 units each year over its 5 year life at a sale price of $100.00. Variable Costs are 25% of sales and fixed overhead is $35,000 per year.

The company is in the 25% corporate tax bracket and has a discount rate of 10%. If the company were to reinvest cash flows from the project each year, it would invest in an account that invests in Treasuries that yield 4%.

Calculate the following and show ALL WORK

a/payback

b/discounted payback period

c/Net Present Value

d/Profitability Index

e/IRR

f/MIRR