Consider a project that involves the purchase of a $10000 machine that will reduce pretax operating costs by $3000 per year over the next five years.
It will not require any changes in net working capital and is expected to have a salvage value of $1000 in five years. The machine will be depreciated
according to the five-year MACRS schedule (note that this schedule has 6 years of depreciation but the machine will be sold after 5 years). The tax rate is
34% and the discount rate is 10%. Construct a table of the relevant cash flows and compute the NPV and IRR. Round all amounts to the nearest dollar.