1 . You must evaluate a proposal to buy a New milling machine . The base price is $135, 000, and shipping and installation costs would add another 58, 000 . The machine falls into the MACRO 3- year class, and it would be sold after 3 years for 594, 500. The applicable depreciation rates are 3 3%6, 4596, 15%6, and 796 . The machine would require a 5 5, OOD increase in net Operating working capital ( increased inventory less increased accounts payable ) . There would be no Effect on revenues, but pretax labor costs would decline by 5 5 2, 00 0 per year . TheE marginal tax rate is 35%6, and the WALL is 8%6. Also, the firm spent 54, 500 last year investigating the feasibility of using the machine . a. How should the 54, 500 spent last year be handled ?" Do . What is the initial investment outlay for the machine for capital budgeting purposes, that is , what is the Year O project cash flow ?" [ . What are the projects annual cash flows during Years 1, 2, and 3 ?) J. Should the machine be purchased ? Explain your