Dorothy & George Company is planning to acquire a new machine at a total cost of $ The machine's estimated life is years
and its estimated salvage value is $ The company estimates that annual cash savings from using this machine will be $ The
company's aftertax cost of capital is and its income tax rate is The company uses straightline depreciation nonMACRS
basedUse Appendix C Table and Appendix C Table Do not round intermediate calculations. Negative amounts should be
indicated by a minus sign. Round "Payback period" to decimal places and all other answers to the nearest dollar amount.
Required:
What is this investment's net aftertax annual cash inflow?
Assume that the net aftertax annual cash inflow of this investment is $; what is the payback period in years?
Assume that the net aftertax annual cash inflow of this investment is $; what is the net present value NPV of this investment?
What are the minimum net aftertax annual cost savings that make the proposed investment acceptable ie the dollar cost savings
that would yield an NPV of $
