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The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,120,000, and it would cost another
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,120,000, and it would cost another $16,500 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 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 15%, what is the NPV of the project? $ Should the machine be purchased
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