Aubie space industries has purchased a new robot for their


Aubie Space Industries has purchased a new robot for their rocket assembly plant in Montgomery. The installed first cost of the robot is $250K and the robot is depreciated via MACRS on a 7 year life. Hyundai pays $50K for the robot from retained earnings and takes out an amortized loan of $200K which is payable in 3 equal installments (payments) over 3 years (each installment paid at the end of the year). The nominal interest rate (APR) of the loan is 8%. The robot is estimated to cost $4,000 the first year in maintenance, and this will increase by $1000 each year. The cost savings (benefits) the robot is estimated to be $50K the first year and $60K thereafter. The robot will be dismantled and sold after 3 years. The estimated salvage value at that time is $140K. Hyundai has a tax rate of 35% and an after tax MARR of 10%. Find the after tax cash flows for each of these 3 years and overall net present value of the proposed project.

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Financial Management: Aubie space industries has purchased a new robot for their
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