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NEW PROJECT ANALYSIS

The project would have no effect on revenues, but it should save the firm $$20,000$ 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.

$

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 $3$

c$.$ If the WACC is $12\%,$ should the spectrometer be purchased?

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