You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The movers basic price is $40,000, and it will cost another $10,000 to modify it for special use by Ellis Construction. Assume that the mover falls into the MACRS 3-year class (33.33%, 44.45%, 14.81%, and 7.41%). It will be sold after 3 years for $20,000, and it will require an increase in working capital (spare parts inventory) of $2,000 at the beginning. The earthmover purchase will have no effect on revenues, but it is expected to save Ellis $20,000 per year in before-tax operating costs, mainly labor. Elliss marginal federal-plus-state tax rate is 40%. The cost of capital (discount rate) is 9%. a. What is the initial (t=0) cash outflows? b. What is the operating cash inflows at t=1? c. What is the operating cash inflows at t=2? d. What is the total cash inflows (operating cash flows plus terminal cash flows) at t=3? e. Compute the NPV and IRR of the project. What is your conclusion?