Jonhson Products is considering purchasing a new milling machine that costs $100,000. The machine’s installation and shipping costs will total $2,500. If accepted, the milling machine project will...

1. Jonhson Products is considering purchasing a new milling machine that costs

$100,000. The machine’s installation and shipping costs will total $2,500. If accepted,

the milling machine project will require an initial net working capital investment of

$20,000. Johnson plans to depreciate the machine on a straight-line basis over a

period of 8 years about a year ago, Jonhson paid $10,000 to a consulting firm to

conduct a feasibility study of the new milling machine. Jonhson’s marginal tax rate is

40 percent.

a. Calculate the project’s net investment (NINV)

b. Calculate the annual straight-line depreciation for the project.