Cash flows estimation and capital budgeting: You are the head of finance department in XYZ Company. You are considering adding a new machine to your production facility. The new machines base price is $11,000.00, and it would cost another $1,970.00 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 three years for $1,550.00. The machine would require an increase in net working capital (inventory) of $840.00. The new machine would not change revenues, but it is expected to save the firm $41,545.00 per year in before-tax operating costs, mainly labor. XYZ's marginal tax rate is 32.00%. If the project's cost of capital is 17.10%, what is the NPV of the project?

a. What is the initial cash outlay? (4 pts.) b. What is the free cash flow for year 1? (4 pts) c. What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital also called terminal value)? (4 pt)

(please show your work in details and highlight your answers)