The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,050,000, and it would cost another $16,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $572,000. The MACRS rates for the first three years are 0.3333, 0.4445, 0.1481, and 0.0741. The machine would require an increase in net working capital (inventory) of $15,000. The sprayer would not change revenues, but it is expected to save the firm $430,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%.

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

$

b. 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	$

c. 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.

$

d. If the project's cost of capital is 14 %, what is the NPV of the project? Round your answer to the nearest dollar. $

e. Should the machine be purchased?