The cost of the new machine is S127,000. Installation will cost S20.000 s4, 000 in net working capital will be needed at the time of installation The project will increase revenues by $85,000 per year, but operating costs will increase by 35% of the revenue increase Simplified straight line depreciation is used. Class life is 5 years, and the firm is planning to keep the project for 5 years. Salvage value at the end of year 5 will be $50,000. 14% cost of capital; 34% marginal tax rate.• The cost of the new machine is $127,000. • Installation will cost $20,000. • $4,000 in net working capital will be needed at the time of installation. • The project will increase revenues by $85,000 per year, but operating costs will increase by 35% of the revenue increase. • Simplified straight line depreciation is used. • Class life is 5 years, and the firm is planning to keep the project for 5 years. • Salvage value at the end of year 5 will be $50,000. • 14% cost of capital; 34% marginal tax rate