ilana industries incorporated needs a new lathe. it can buy a new high-speed lathe for $1.5 million. the lathe will cost $50,000 per year to run, but it will save the firm $160,000 in labor costs and will be useful for 10 years. suppose that, for tax purposes, the lathe is entitled to 100% bonus depreciation. at the end of the 10 years, the lathe can be sold for $400,000. the discount rate is 10%, and the corporate tax rate is 21%. what is the npv of buying the new lathe?



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