New$-$Project Analysis

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $$880,000,$ and it would cost another $$17,000$ to install it$.$ The machine falls into the MACRS $3-$year class $($the applicable MACRS depreciation rates are $33\mathrm{.}33\%,44\mathrm{.}45\%,14\mathrm{.}81\%,$ and $7\mathrm{.}41\%),$ and it would be sold after $3$ years for $$600,000.$ The machine would require an increase in net working capital $($inventory$)$ of $$19,000.$ The sprayer would not change revenues, but it is expected to save the firm $$391,000$ per year in before$-$tax operating costs, mainly labor. Campbell's marginal tax rate is $40\%.$

What is the Year $0$ net cash flow?

$

What are the net operating cash flows in Years $1,2,$ and $3?$ Do not round intermediate calculations. Round your answers to the nearest dollar.

Year $1$ $

Year $2$ $

Year $3$ $

What is the additional Year $3$ cash flow $($i$.$e$,$ the after$-$tax salvage and the return of working capital$)?$ Do not round intermediate calculations. Round your answer to the nearest dollar.

$

If the project's cost of capital is $10\%,$ what is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar.

$

Should the machine be purchased?

$-$Select$-$