27. (10 points) The president of Columbus Pines Inc. has asked you to evaluate the proposed project that requires an acquisition of a new machine. The machine's price is $50,000, and it falls into the MACRS 3-year class. This new project would require an increase in Year MACRS Percent net operating working capital of $8,000. To finance this project, Columbus Pines borrowed $30,000 at 8% annual interest rate. This project would increase the firm's 1 0.33 before-tax revenues by $30,000 per year but would also increase operating costs by 3 0.15 $12,000 per year. The machine is expected to be used for 3 years and then be sold for $25,000. (Thus the project is a 3-year project). The firm's marginal tax rate is 40 percent. Calculate the net cash flows for Year 0, 1, and 3 (the final year). 2 0.45 4 0.07