I have been asked by the president and CEO of Kidd Pharmaceuticals to evaluate the proposed acquisition of a new labeling machine for one of the firm's production lines. The machine's price is $50,000, and it would cost another $10,000 for transportation and installation. The machine falls intothe MACRS three-year class, and hence the tax depreciation allowances are 0.33, 0.45, and 0.15 inYears 1, 2, and 3, respectively. The machine would be sold after three years because the productionline is being closed at that time. The best estimate of the machine's salvage value after three years ofuse is $20,000. The machine would have no effect on the firm's sales or revenues, but it is expected tosave Kidd $20,000 per year in before-tax operating costs. The firm's tax rate is 40 percent and itscorporate cost of capital is 10 percent. Please show work.

a. I need the project's net investment outlay at Year 0.

b. I need the project's operating cash flows in Years 1, 2, and 3.

c. I need the terminal cash flows at the end of Year 3.

d. If the project has average risk, I need to know if the project is expected to be profitable.