Hungry Company is considering the acquisition of Target Company at a cash price of $60,000. Target has liabilities of $90,000. Target has a large machine that Hungry needs; the remaining assets would...

Hungry Company is considering the acquisition of Target Company at a cash price of $60,000. Target has liabilities of $90,000. Target has a large machine that Hungry needs; the remaining assets would be sold to net $65,000. As a result of acquiring the machine, Hungry would experience an increase in cash inflow of $20,000 per year over the next 10 years. The firm has a 14% cost of capital.  Don't forget to consider time value.

1. What is the effective or net cost of the large machine?

14.       If the firm could purchase an identical press which would provide $26,000 annual cash inflow for 10 years for a price of $120,000, what would the net benefit be