The XYZ Company is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60 000 and its annual operating…

The XYZ Company is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60 000 and its annual operating cost is $2 675.40. The machine has a life of 7 years, and it is expected to generate $15 000 in revenues in each year of its life. MARR is set at 20%. 
a. What is the Rate of Return of the acquisition? 
b. How much is the cash flow excess? 
c. The NPV of the investment is . 
d. Payback Period is . 
 
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