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You must evaluate the purchase of a proposed spectrometer for the RaD department. The purchase price of the spectrometer including modifications is $230,000, and the

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You must evaluate the purchase of a proposed spectrometer for the RaD department. The purchase price of the spectrometer including modifications is $230,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $94,000. The equ pment would require a $9,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $53, 0oo per year in befofe-tax laber costs. The firm's marginal federal-plus-state tax rate is 25 thi a. What is the initial investment outlay for the spectrometer after bonus depreciation is considered, that is, what is the Year o project cach fiow? Enten your answer as a dotitive value. Round your answer to the nearest dollar. 3 b. What are the project's annual cash flows in Years 1,2, and 3 ? Do not round intermediate calculations. Round your answers to the neacest dollar: Year 1:5 Year 2:5 Year 3:5 c. If the WACC is 12%, should the spectrometer be purchased

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