NEW PROJECT ANALYSIS ension Project You must evaluate the purchase of a proposed spectrometer for the RSD department. The base price is $240,000, and it would cost another $48,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $120,000. The applicable depreciation rates are 33%, 45,15% and 7%. The equipment would require a 58,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $42.000 per year in before tax labor costs. The firm's marginal federal-plus-state tax rate is 10% a. What is the initial investment autay for the spectrometer, that is what is the Year project cash flow? Round your answer to the nearest Cont. Negative amount should be indicated by a minus sign b. What are the project's annual cash flows in Years 1, 2 and 37 Round your answers to the nearest cent. In Year 15 In Year 2 In Year 35 the WACC IS 126, should the spectrometer be purchased -Select