The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $820,000, and it would cost another $16,000 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 $553,000. The machine would require an increase in net working capital (inventory) of $14,500. The sprayer would not change revenues, but it is expected to save the firm $422,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 40%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.

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

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

   Year 1:
   Year 2:
   Year 3:

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

4. If the project's cost of capital is 10 %, what is the NPV of the project?

5. Should the machine be purchased?