Dorothy \& George Company is planning to acquire a new machine at a total cost of $64,800. The machine's estimated life is 6 years and its estimated salvage value is $600. The company estimates that annual cash savings from using this machine will be $12,100. The company's after-tax cost of capital is 8% and its income tax rate is 40%. The company uses straight-line depreciation. (Use Appendix C, Table 1 and Appendix C, Table 2.) (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round answers to the nearest dollar amount.) Required: 1. What is this investment's net after-tax annual cash inflow? 2. Assume that the net after-tax annual cash inflow of this investment is $9,000; what is the net present value (NPV) of this investment? 3. What are the minimum net after-tax annual cost savings that make the proposed investment acceptable (i.e., the dollar cost savings that would yield an NPV of $0 )? Hint: Redo the NPV analysis by setting the NPV equal to zero and making the annual after-tax cash flows equal to X; then solve for X and enter the amount as your answer. Also consider using Goal Seek in Excel 
Other questions asked by students
Calculus
Q
3.sometimes we use them interchangeably but they really are two very different things - salt and...
Medical Sciences
Electrical Engineering
Advance Math
Physics
Q
Una empresa de publicidad quiere comenzar a usar IA para clasificar listas de clientes, verificar...
Accounting
Accounting
Accounting