What is the cash flow at year one

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You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose machine. The machine's total price including installation and delivery is $70,000. The machine falls into the four-year class using straight line depreciation method, and it will be sold after four years for $0. The use of this new machine will bring revenue of $25,000 annually for 4 years, and will have annual maintenance expense of $5,000. The firm's marginal tax rate is 40 percent and the required rate of return is 10%. (Please show your work)

a. What is the initial investment ? (keep your number as a whole number: example of answer format: $1,000)

b. What is the Cash Flow at year 1 ? ( keep your number as a whole number: example of answer format: $1,000 )

c. What is the Cash Flow at year 4 ? ( keep your number as a whole number: example of answer format: $1,000 )

d. What is NPV ? ( keep your number to two decimals: example of answer format: $1,000.00 or if it's negative, then -$1,000.00)

Reference no: EM131188173

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