1. Consider an asset that costs $431,200 and is depreciated straight-line to zero over its 12-year tax life. The asset is to be used in a 7-year project; at the end of the project, the asset can be sold for $53,900. Required : If the relevant tax rate is 32 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)

$89,438.06

$36,652.00

$94,145.33

$761,080.00

$98,852.60

2. Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $1,123,200 is estimated to result in $374,400 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $163,800. The press also requires an initial investment in spare parts inventory of $46,800, along with an additional $7,020 in inventory for each succeeding year of the project. Required : If the shop's tax rate is 31 percent and its discount rate is 19 percent, what is the NPV for this project? (Do not round your intermediate calculations.)

$-186,301.12

$-181,780.87

$-283,167.32

$-195,616.18

$-176,986.07