tartle Corporation wants to purchase a new production machine. They currently have an old
machine, which is operable for five more years and is expected to have a zerodisposal value at
the end of five years. If the company buys the new machine, the old machine will be sold now
for $book value is $ The new machine will cost $ and will be
depreciated for tax purposes on a straightline basis over its useful life of years. The new
machine will not have a salvage value and will not be sold after its useful life. An additional
cash investment in working capital of $ will be required if the new machine is purchased.
The investment is expected to generate $ in before tax cash net inflows during the first
year of operation. The expected before tax cash net inflow for years two through five is
$ each year. These cash flows do not include depreciation and are recognized at the end
of each year. The working capital investment will not be recovered at the end of the asset's life.
The companys tax rate is
points What are the aftertax cash flows in year and year Round to the nearest
dollar
