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(Calculating project cash flows and? NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine

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(Calculating project cash flows and? NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $65,000 per year. The machine has a purchase price of $100,000 , and it would cost an additional $8,000 after tax to install this machine correctly. In? addition, to operate this machine? properly, inventory must be increased by $20,000. This machine has an expected life of 10 ?years, after which time it will have no salvage value. ? Also, assume simplified? straight-line depreciation, that this machine is being depreciated down to? zero, a 31 percent marginal tax? rate, and a required rate of return of 13 percent.

a. What is the initial outlay associated with this?project?

b. What are the annual? after-tax cash flows associated with this project for years 1 through 9??

c. What is the terminal cash flow in year 10? ?(that is, the annual? after-tax cash flow in year 10 plus any additional cash flow associated with termination of the? project)?

d. Should this machine be purchased?