Question: After-Tax NPV Berradi Corp. is considering the purchase of a new stamping machine to manufacture its product. The following information is available
![1546_NM.png](https://secure.tutorsglobe.com/CMSImages/1546_NM.png)
If Berradi purchases the new machine, it will use it for 10 years and then trade it in on another machine. The company computes depreciation on a straight-line basis, for both taxes and fi nancial reporting purposes. Assume Berradi currently has an old stamping machine with a book value of $30,000 that it can currently dispose of for $8,000 if it buys the new machine. Assume Berradi's cost of capital is 14%, and its tax rate is 30%. Should the new machine be purchased based on the NPV method?