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Thompson, as the CFO of a clock maker, is considering an investment of a $420,000 machine that has a seven year life and no salvage value.

Ms. Thompson, as the CFO of a clock maker, is considering an investment of a $420,000 machine that has a seven year life and no salvage value. The machine is depreciated by a straight line method with a zero salvage value over the seven years. The appropriate discount rate for cash flows of the project is 13 percent, and the corporate tax rate of the company is 35 percent. Evaluate the profitability of the project under the following scenario

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