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B eBook Problem Walk-Through New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is

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B eBook Problem Walk-Through New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,080,000, and it would cost another $21,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $611,000. The machine would require an increase in net working capital (inventory) of $19,000. The sprayer would not change revenues, but it is expected to save the firm $381,000 per year in before tax operating costs, mainly labor. Campbell's marginal tax rate is 40%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations, Round your answers to the nearest dollar a. What is the Year- net cash flow? $ b. What are the net operating cash flows in Years 1, 2, and 3? Year 1: $ Year 2:5 Year 3: 5 What is the actional Year 3 cashow (the tax salvage and the return of working capital) $ d. If the project's cost of capital is 10, what is the NPV of the project $ Should the machine be purchased

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