3. Blue Creek Industrial Inc. is considering updating its production process. The managers are considering replacing a machine which it purchased four years ago with an installed cost of S620.000. There are 2 vears of depreciation remaining using the MACRS rates given below. The new machine, a BIOVAT 3000, will cost $900,000 and will require an additional $29,000 for delivery and installation. This new unit will also require training costs of approximately $11,000. The MACRS rates are 20%, 32%, 19%, 12%, 11%, and 6% for years 1 through 6 respectively, and the marginal tax rate is 34%. The old machine is expected to be sold for approximately $320,000 today or $38,000 ten years from now. If BCI purchases the new equipment, annual revenues are expected to increase by about $47,000 per year, however, the expenses are expected to decrease from $42,000 with the old equipment to $27,000 with the new machine in the first year. Beyond that, the company's expenses are expected to be an additional $3.000 less per year. Since the new machine is expected to be more efficient, net operating working capital (mainly due to required inventory) is expected to fall by S4,000 at the outset of the project and remain at that new level through the duration of the project. a) (8 points) Calculate the year 0 cash flow which would be used for capital budgeting purposes. b) (8 points) Calculate the year I net cash flow which would be used for capital budgeting! purposes