Harine Corp. is considering the purchase of a new production machine. The equipment's base price is $534,800, installation costs are approximately $12,700 and shipping costs about $7,100. The equipment falls into MACRS 5-year class. However, the company plans on using the machine for only 3 years, at which time it can be sold for an estimated price of $299,675. (The MACRS5-year rates are: 20%, 32%, 19.20%, 11.52%, 11.52%, and 5.76%.) This efficient new machine will produce additional sales of $240,000 per year for 3 years, and it will also result in a net increase in costs and expenses by $60,000 per year. Use of the equipment will require an increase in spare part inventory of $17,000, an increase in accounts payable of $6,000. The firm's marginal tax rate is 30%. a. What is the Year- 0 net cash flow? b. What are the cash flows in Years 1 and 2? c. What is the cash flow in Year 3? d. If the projects cost of capital is 14%, should the new production machine be purchased based on NPV and IRR? Why or why not?