Assignment 12: Chapter 12 EOC problems Back to Assignment Attempts: Keep the Highest /15 5. Problem 12.08 (New Project Analysis) ebook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $280,000, and the equipment will be fully deprecated at the time of purchase. The equipment would be sold after 3 years for $123,000. The equipment would require a $15,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $25,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. 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 3? Do not round intermediate calculations. Round your answers to the nearest dollar Year 1:5 Year 2: $ Year 3: 5 c. If the WACC is 13%, should the spectrometer be purchased? -Gelect