d) A university student painter is considering the purchase of a paint sprayer to replace an old one. The new paint sprayer costs $12,000 and has a useful life of four years, at which time it can be sold for $1,600. The old paint sprayer can be sold now for $500 and could be scrapped for $250 in four years. The student believes that operating revenues will increase annually by $8,000. The tax rate is 22% and the required rate of return is 15% and the PV of CCATS is estimated at $1,372. What is the NPV of buying a new sprayer? Should the student replace the old sprayer? Explain. (use below table in your answer) Years Initial Investment Salvage Value Sale of old equipment Opportunity cost Total Capital Spending Increase in Revenues Taxes After-tax Operating Cash Flow Total Capital Spending & after tax OCF PV of CF PVCCAT 0 1 2 3 4 1,372 NPV Should the student accept or reject the project? Explain.