187385782 Ch 12: End-of-Chapter Problems - Cash Flow Estimation and Risk Analysis Q Search this course Back to Assignment Attempts: 0 Keep the Highest: 0/4 6. Problem 12.08 (New Project Analysis) AZ eBook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer induding modifications is $220,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for 350,000. The equipment would require a $5,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $36,000 per year in before-tax tabor costs. The firm's marginal federal-plus-state tax rate is 25 a. What is the initial Investment outlay for the spectrometer, that is what is the Year project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar b. What are the project's annual cash flows in Years 1, 2 and 32 Do not found intermediate calculations. Round your answers to the nearest dollar Year 19 Year 2:$ Year 3: $ mus c. If the WACC IS 13%, should the spectrometer be purchased? -Select A Grade it Now Save & Continue Continue without saving