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can you do C and d -line depreciation? 13-6 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line.

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-line depreciation? 13-6 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 $22,500 to install it. The machine falls into the MACRS 3-year class, d it would be sold after 3 years for $605,000. The MACRS rates for the Erst 3 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 $380,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. a. What is the Year-0 cash flow? h. What are the net operating cash flows in Years 1, 2, and 3? c What is the additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)? d. If the project's cost of capital is 12%, should the machine be purchased

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