Holmes Manufacturing is considering a new machine that costs $260,000 and would reduce pretax manufacturing posts by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of ^24,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a %4,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, nut pretax labor costs would decline by $44,000 per year. The marginal tax rate is 35%, and the WACC is 10%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine. Holmes Manufacturing is considering a new machine that costs $260,000 and would reduce pretax manufacturing posts by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of ^24,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a %4,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, nut pretax labor costs would decline by $44,000 per year. The marginal tax rate is 35%, and the WACC is 10%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine