Mombod

Business

24 November, 16:24

The machine jubilee corporation is considering for purchase has an estimated useful life of 5 years. If the new machine is purchased, pretax cash flows are estimated as follows:

Pretax cash inflows Pretax cash outflows

Year 1 $40,500 $18,000

Year 2 50,400 27,000

Year 3 44,100 22,500

Year 4 40,500 20,700

Year 5 37,200 18,000

Required:

Jubilee's cost of capital is 10% and its tax rate is 21%. Calculate the after-tax net present value of the estimated cash flows.