3 points) The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls in the MACRS 3-year class. The applicable depreciation rates are 33 percent, 45 percent, 15 percent, and 7 percent. Purchase of the computer would require an increase in accounts payable of $2,000. The computer would have an EBT & Depreciation of 313,000. The computer is expected to be used for three years and then sold for $25,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent. What is the project's NPV? Project analysis worksheet 0 1 2 Initial outlay 1) Cost 2) Change in NOWC 3) Total net investment Operating flows: 4) EBT and depreciation 5) Operating income after taxes (line 4 *(1-tax)) 6) Depreciation (from table) 7) Tax savings from depreciation (line 6 * tax) 8) Net operating cash flows (lines 5 + 7) Terminal year cash flows: 9) Estimated salvage value 10) Tax on salvage value (line 9-book value) tax) 11) Return of NOWC 12) Total termination CFS (lines 9 + 10 + 11) Net cash flows: 13) Net CFS (lines 3 + 8 + 12) Book value = initial cost - sum of accumulated depreciation = line 1 - sum of line 6