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XYZ is now evaluating the purchase of a new machine for $210,000 installed with no NWC...

XYZ is now evaluating the purchase of a new machine for $210,000 installed with no NWC change. They plan to sell the machine at the end of 3 years for $30,000. MACRS 3 year depreciation. With the more efficient machine, labor savings per year are expected to be $70,000, $94,000 and $76,000 respectively. 40% tax. The cost of capital for this project is 8.%.

What is the net terminal (salvage) value?

What is the discounted payback for this project?

What is the IRR?

Math   Advanced-Math   
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