Wonder-Bread Company is considering a new highly automated oven. The cost of the new oven is $70,000 plus $30,000 for modification and installation. Company plans to use the oven for only 3 years and at the end of the year 3 to sell it for $10,000 before taxes. According to the IRS, the oven falls in the three-year category with MACRS depreciations rates of 45%, 33%, 15%, 7% for years 1 through 4, respectively. Wonder-Bread can now produce other products such as cake with this oven in addition to breads which this will result in the revenue to increase by $45,000 but at the same time to lower the variable costs by $35,000 annually, all before taxes. However, the new oven requires an increase of $7,000 in operating current assets and $3,000 increase in the operating current liability. The firm has a 21% tax rate and its cost of capital is 10%. Show all your steps including formulas. Note: If you use Excel, please paste (CTRL+V) the Excel file after the last questions.

a) What is the total cost of this oven? b) What is the change in the Net Working Capital due to this oven? c) What is the new oven's initial cash outlay at time zero? d) What are the new oven's annual depreciations for years 1 through 4? e) What are the new oven's operating cash flows for the next 3 years? f) What are the new oven's net salvage value at the end of year 3? g) What is the new oven's terminal cash flow at the end of year 3? h) What is the NPV of this oven given the cost of capital of 10%? i) Based on your finding in part (h), should the company buy the new oven? Why?