Consider a $12,000 Machine That Will Reduce After-Tax Operating Costs

question 13

Multiple Choice

Consider a $12,000 machine that will reduce after-tax operating costs by $2,500 per year over a five-year period. Assume no changes in net working capital and a salvage value of zero. Further
Assume that the machine belongs in a 20% CCA class, a marginal tax rate of 34%, and a required
Return of 10%. The project NPV is:

• A) $73
• B) $449
• C) $689
• D) $827
• E) $1,235

---

Definitions:

Stator Speed

The rotation speed of the stator, which is a stationary component of electromagnetic circuits in motors or generators.

Slip Speed

The difference in speed between the rotor of an induction motor and the actual magnetic field's speed.

Split-phase Motors

A type of single-phase induction motor that uses a secondary start winding or auxiliary winding offset by electrical degrees to create a phase shift, helping to start the motor.

Pulsating Magnetic Field

A magnetic field that varies in amplitude over time in a periodic manner.