Click here to read the eBook: Analysis of an Expansion Project NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $210,000, and it would cost another $42,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $52,500. The applicable depreciation rates are 33% 45% 159 , and 7%. The equipment would require a $10,000 increase in net operating working capital spare parts im e to The ro ect ould have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm s marginal federal plus state tax rate is 40% a. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign 262000 b. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent In Year 1 In Year 2$ In Year 3 $ 296, should the spectrometer be purchased? c. If the WACC is 1 Select