Tele Corp. is considering the purchase of a new production machine. The equipment's basic price is $250,000, installation costs are approximately $7,000, and the shipping fees are about $3,000. The equipment falls into MACRS 5-year class. However, the company plans to use the machine only for 3 years, at which time it can be sold for an estimated price of $111,580. (MACRS 5-year: 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76%.) This efficient new machine will produce additional sales of $70,300 per year for 3 years, and it will also result in a before-tax net reduction of costs and expenses by $15,860 per year. Use of the equipment will also require the following: an increase in spare part inventory of $9,000; an increase in prepaid expenses of $5,000; an increase in accounts payable of $2,000. The firm's marginal tax rate is 40%. a. What is the Year- 0 net cash flow? b. What are the cash flows in Years 1 and 2? c. What is the cash flow in Year 3? d. If the projects cost of capital is 15.70%, should the new production machine be purchased based on NPV and IRR? Why or why not?