New$-$Project Analysis

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $$890,000,$ and it would cost another $$20,500$ 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 $$569,000.$ The machine would require an increase in net working capital $($inventory$)$ of $$18,000.$ The sprayer would not change revenues, but it is expected to save the firm $$397,000$ per year in before$-$tax operating costs, mainly labor. Campbell's marginal tax rate is $30\%.$

What is the Year$-0$ net cash flow?

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What are the net operating cash flows in Years $1,2,$ and $3?$ 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$)?$ Round your answer to the nearest dollar.

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If the project's cost of capital is $13\%,$ what is the NPV of the project? Round your answer to the nearest dollar.

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