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The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $ 1 , 0 5 0

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 $21,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%,44.45%,14.81%, and 7.41%), and it would be sold after 3 years for $634,000. The machine would require an increase in net working capital (inventory) of $12,000. The sprayer would not change revenues, but it is expected to save the firm $499,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%. 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?
$
b. What are the net operating cash flows in Years 1,2, and 3?
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)?
$ d. If the project's cost of capital is 12%, what is the NPV of the project?
$ Should the machine be purchased?
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