New$-$Project Analysis

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $\backslash (\backslash$$ $930,000\backslash ),$ and it would cost another $\backslash (\backslash$$ $18,500\backslash )$ to install it$.$ The machine falls into the MACRS $3-$year class, and it would be sold after $3$ years for $\backslash (\backslash$$ $609,000\backslash ).$ The MACRS rates for the first three years are $0\mathrm{.}3333,0\mathrm{.}4445,$ and $0\mathrm{.}1481.$ The machine would require an increase in net working capital $($inventory$)$ of $\backslash (\backslash$$ $19,500\backslash ).$ The sprayer would not change revenues, but it is expected to save the firm $\backslash (\backslash$$ $397,000\backslash )$ per year in before$-$tax operating costs, mainly labor. Campbell's marginal tax rate is $\backslash (25\backslash \%\backslash ).($Ignore the half$-$year convention for the straight$-$line method.$)$ Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.

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

$\backslash$$

b$.$ What are the net operating cash flows in Years $1,2,$ and $3?$

Year $1$:$\backslash$$

Year $2$:$\backslash$$

Year $3$:$\backslash$$

c$.$ What is the additional Year$-3$ cash flow $($i$.$e$,$ the after$-$tax salvage and the return of working capital$)?$

$\backslash$$

d$.$ If the project's cost of capital is $\backslash (15\backslash \%\backslash ),$ what is the NPV of the project?

$\backslash$$

Should the machine be purchased?