Problem
A firm is considering purchasing a new machine, which costs $600,000 and has a six-year life, a CCA rate of 25 percent and an expected salvage value of $40,000. The asset class will remain open. The project will generate sales revenue of $200,000 in the first year, which will grow at 6 percent per year in the subsequent years. Variable costs will be $80,000 for the first year, which will grow at 7 percent per year. The firm's marginal tax rate is 35 percent and required return is 10 percent. Should the project be accepted? solve it with calculator.