1. Problem 12.09 (New Project Analysis) ook You must evaluate a proposal to buy a new miting machine. The purchase price of the miling machine, inducing shipping and installation costs, $107,000, and the equipment will be fully deprecated at the time of pure 33.500 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 531,000 per year. The marginal feasibility of using the machine How should the $4.500 spent last year behandled? 1. Only the tax effect of the research expenses should be included in the analysis It. Last year's expenditure should be treated as a terminal cash flow and eat with the end of the projects it. Hence, it should not be included in the intal investment Buty II. Last year's expendture is considered an opportunity cost and does not represent an incrementalashow. Hence, should not be included in the analysis I. Last year's expenditure is considered a sun cost and does not represent an incremental cash flow. Hence, it should not be included in the analyses The cost of research is an incremental cash low and should be included in the way Select What is the initial investment outlay for the machine for capital budgeting purposes at the 100% bonus depreciation is considered that is what is the Year project cash flow inter your answers a positive 3 What are the projects annual cash flows during Years 1,2,37 not round intermediate calculations. Round your answers to the nearest dolla. Year 13 Yows Years 6. Should the machine be purchased ce of the milling machine, including shipping and installation costs, is $107,000, and the equipment will be fully depreciated at the time of purchase. The machine would be sold after 3 years for $66,000 eased accounts payable). There would be no effect on revenues, but pretax tabor costs would decline by $31,000 per year. The marginal tax rate is 25%, and the WACC W 12%. Also, the firm spent 14, luded in the analysis sh flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay. and does not represent an incremental cash flow. Hence, it should not be included in the analysis. not represent an incremental cash flow. Hence, it should not be included in the analysis d be included in the analysis meting purposes after the 100% bonus depreciation is considered, that is, what is the Year O project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar o not round intermediate calculations. Round your answers to the nearest dollar and installation costs, is $107.000, and the equipment will be fully depreciated at the time of purchase. The machine would be sold after 3 years for $66,000. The machine would require a o effect on revenues, but pretax labor costs would decline by $31,000 per year. The marginal tax rate is 25%, and the WACC is 12%. Also, the firm spent $4,500 last year investigating the dect's ife. Hence, it should not be included in the initial investment outlay. flow. Hence, it should not be included in the analysis. ence, it should not be included in the analysis ociation is considered, that is, what is the Year O project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar and your answers to the nearest dollar