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Madison Manufacturing is considering a new machine that costs $350,000and would reduce pre-tax manufacturing costs by $110,000annually

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Madison Manufacturing is considering a new machine that costs $350,000and would reduce pre-tax manufacturing costs by $110,000annually. Madison would use the 3 -year MACRS method to depreciate the machine, and management thinks the machine would have a value of $33,000at the end of its 5 -year operating life. The applicable depreciation rates are 33.33% 44.45%,14.81%, and 7.41%,as discussed in Appendix 13A. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5 -year life. Madison's marginal tax rate is 40%,and a 10%cost of capital is appropriate for the project.

a. Calculate the project's NPV, IRR, MIRR, and payback.