041 X x 1 3. The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,000,000, and it would cost another $22.600 to 2 install it. The machine falls into the MACRS 3.year class, and it would be sold after 3 years for $605,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital inventory) of $15.500. The sprayer would not change revenues, but it is expected to save the firm 4 $380,000 per year in before tax operating costs, mainly labor. Campbell's marginal tax rate is 35% 7a. What is the Year net cash flow? 9 Base Price 10 Installation Charges 11 Increase in NWC 12 Year Onet CF 14 . What are the net operating cash flows in Years 1, 2 and 3? 16 Depreciable Basis 17 BeforeLax Savings 22 Depreciation rate 23 Depreciation 24 Remaining Book Value 26 Before I savings 27 Depreciation 28 EBIT1-T) 29 Depreciation 30 Net Operating CF 32 What is the additional Year-3 cash flowe 1 2 3 , the after tax salvage and the return of working capital? Type here to search 22 Depreciation rate 23 Depreciation 24 Remaining Book Value 26 Before-tax savings 27 Depreciation 28 EBIT(1-T) 29 Depreciation 30 Net Operating CF 32 c. What is the additional Year 3 cash flow fe, the after tax salvage and the return of working capital? 34 Salvage value 35 Book value 36 Gain or loss 37 Tax on salvage value 38 After-tax salvage value 39 Return of NWC 40 Terminal year cash flow 42 d. If the project's cost of capital is 12%, should the machine be purchased? 44 Cost of capital 47 Net Cash Flow NPV- 1 2 3 4 Type here to search