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Problem she company you R&D depar special use by 23. 0.45), and The president of the company you At of the company you work for has asked you to evaluate the proposed acquisition of new chromatograph for the firm's R&D department. The equipment's mant's basic price is $75,000, and It would cost another 15 000 to install it for special use by your firm. The chromatograph falls MACRS 3-year class, and the MACRS rates are 0.3333, 0.49 1.0.4445, 0.1481, and 0.0741. The 'p the machine for its entire useful life (that is 4 years), and the machine would be Years for $35.000. Use of the equipment would require an increase in net working parts inventory) of $5,000. The machine would have no effect on revenues, but it is rating costs, mainly labor. The firm's pected to save the firm S30.000 per year in before-tax operas marginal federal-plus-state tax rate is 28%. a) What is the total initial cash outflow, i.e. CFo? (1 points) firm would keep the machine for its sold after 4 years for $35.000. Use of capital (spare parts inventory) of $5,0 b) What is the depreciation for each year of the project? (3 points) b. Find the incremental operating cash flows for each year 1, year 2, year 3 and year 4. (6 points) OCF17 c. What is the terminal cash flow from after-tax salvage value and working capital recovery? (3 points) Hint: Since the firm plans to keep the machine for its entire useful life, the book value of the machine will be zero at the end of 4 years d. What is the net present value of the project? What is the decision on the project? (2 points)