BUSN 5200 Homework Assignment for Week 8: List the three steps that make up the general approach to capital budgeting. Define an "Incremental cash...

1. List the three steps that make up the general approach to capital budgeting.2. Define an “Incremental cash flow” as the term is used in capital budgeting3. Your firm is considering buying a new machine that costs $200,000, is expected to generate $110,000 in new revenue each year and will cost $45,000 a year to operate. If your firm's marginal income tax rate is 35% what is the Net Cash Flow your firm will realize from the new machine during the first year? Assume the MACRS depreciation rate for the machine for year 1 is 20%. Note - do not include the cost of the machine in your answer.4. Define the payback period method in capital budgeting and state the payback period decision rule.5. What is the payback period of the following project?$50,0008 yearsNet cash flows each year: $10,0006. Consider the following income statement and answer the questions that follow: $200Variable costs ($.80 ea) 802010030702446