Data for all Milton Industries problems are the same. Milton Industries wants to purchase new equipment that has a quoted price of $1,000,000. Milton estimates an additional cost of $75,000 will be...

Data for all Milton Industries problems are the same.Milton Industries wants to purchase new equipment that has a quoted price of $1,000,000.  Milton estimates an additional cost of $75,000 will be needed today to have the equipment modified, shipped, and installed.  The purchase of this additional equipment will require Milton to invest an estimated $85,000 in net working capital upfront, and this investment should be recovered when Milton sells the equipment.  If purchased, the equipment will be employed for a total of six years, and then sold for an estimated $780,000.  The equipment will be depreciated straight-line on a six-year schedule.  During each of the years that the equipment is in service, it is expected to boost Milton’s sales revenue by $398,000 though annual operating costs (other than depreciation) are also expected to be higher, to the extent of $94,000.  Milton faces a marginal tax rate of 35%, and its cost of capital is 10.5%.The NPV of this project will be zero if Milton’s cost of capital were: