You must evaluate a proposal to buy a new milling machine. The purchase price of the miling machine, including shipping and installation costs, is $154,000, and the equipment will be fully deprecated at the time of purchase. The machine would be sold after 3 years for $61,000. The machine would require a $9,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but preta labor costs would decline by 542,000 per year. The marginal tax rate is 25%, and the WACC Is 12. Also, the firm spent $4.500 last year investigating the feasibility of using the machine. o. How should the $4,500 spent last year be handled? 1. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay 11. Last year's expenditure is considered an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis III. Last year's expenditure la considered a sunk cost and does not represent an incremental cash flow. Hence, it should not be Induded in the analysis. IV. The cost of research is an incremental cash flow and should be included in the analyse V. Only the tax effect of the research expenses should be included in the analysis Select b. What is the initial Investment outlay for the machine for capital budgeting purposes after the 100% bonus deprecation is considered, that's what is the Year o project cash now! Enter your answer as a positive value Round your answer to the nearest dolla What are the project's annual can nown during Years 1, 2 und 3? Do not round intermediate calculationHound your answers to the nearest soltar, 3 Year 11 Year 215 Years d. Should the machine be purchased