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LO ebook Problem Walk-Through New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is

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LO ebook Problem Walk-Through New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $990,000, and it would cost another 519,500 to install it. The machine falls into the MACRS 3-year dass (the applicable MACRS depreciation rates are 33,33% 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $571.000 The machine would require an increase in net working capital (Inventory) of 512,500. The sprayer would not change revenues, but it is expected to save the firm $356,000 per year In before tax operating costs, mainly labor. Campbell's marginal tax rates 39. Cash outflows, if any, should be indicated by a minus sign, Do not found intermediate calculations Round your answers to the nearest dollar What is the Year Onet cash now? $ n. What are the net operating cash flows in Years 1, 2 and >> Year to Year 215 Year 3:5 What is the additional Year cash flow (le, theater-tax salvage and the return of working capital 5 d. If the project's cost of capital is 15 what is the NPV of the rect Should the machine be purchased? Yes

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