(ignore income taxes in this problem.) the gage company purchased a machine which will be depreciated by the straight-line method over its estimated 6 year life. the machine will have no salvage value. it will generate cash inflows of $7,000 each year over the next 6 years. gage company's required rate of return is 14%. if the net present value of this investment is $12,016, the purchase price of the machine was:

How should the environmental effects be dealt with when evaluating this project? the environmental effects should be ignored since the plant is legal without mitigation. the environmental effects should be treated as a sunk cost and therefore ignored. if the utility mitigates for the environmental effects, the project is not acceptable. however, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis. the environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. the environmental effects if not mitigated would result in additional cash flows. therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.