NPV Analysis. The JS Company is considering buying a machine at a cost of $800,000, which has the following cash flow pattern. No residual value is expected. Depreciation is by straight-line. Assume...

NPV Analysis. The JS Company is considering buying a machine at a cost of $800,000, which has the following cash flow pattern. No residual value is expected. Depreciation is by straight-line. Assume that the income tax rate is 40%, and the after-tax cost of capital (minimum required rate of return) is 10%. Should the company buy the machine? Use the NPV method.

Year       Cash Inflow,       (1) Cash Outflow, (2)

1              $800,000              $550,000

2              $790,000             $590,000

3              $920,000              $600,000

4              $870,000              $610,000

5              $650,000              $390,000