sprayer's base price is $1,120,000 and cost $23,500 to install it. depreciation rates (33.33%, 44.45%, 14.81%, and 7.41%) sold after 3 years for 617,000. inventory of 13,500. expected to save the firm $460,000 per year in before tax. marginal tax rate 40%.

New Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price $1,120,000, and it would cost another $23.500 to install it. The machine falls into the MACRS J-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.01% and 7.41%), and it would be sold after years for $617,000. The man would require an increase in net working capital inventory) of $13,500. The sprayer would not change revenues, but it is expected to save the form $50,000 per year in before operating mainly labor. Campbell's marginal tax rate is 40% Cash outflows, fany, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the well a. What is the Year 0 net cash flow? 5 b. What are the net operating cash flows in Years 1, 2, and 37 Year 1: $ Year 2:$ Year 3:5 c. What is the additional Year 3 cash flow (le, the after tax salvage and the return of working capital? $ d. If the project's cost of capital is 10 %, what is the NPV of the project? $ Should the machine be purchased? Select Yes No