P OW QUESTIONS The president of the company you work for has asked you to evaluate the proposed acquisition of a new machine for the firm's forensics department. The equipment's basic price is $100,000, and it would cost another $20,500 to modify it for special use by your firm. The device, which falls into the MACRS 3-year class, would be sold after 3 years for $20,500. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481. Use of the equipment would require an increase in net working capital (spare parts & inventory) of $5,600. The machine would have no effect on revenues, but it is expected to save the firm $32,800 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 30%. a. What is the Year-O net cash flow? b. What are the net operating cash flows in Years 1, 2 and 3? Do not include recovery of NWC or salvage value in Year 3's calculation here c. What is the additional cash flow in Year 3 from NWC and salvage? d. If the project's cost of capital is 11%, what is the NPV of the project? e. Should the device be purchased? Why? Attach File Browse Local Files QUESTION 6 What are the three types of proiect risk