Back to Assignment Attempts: Keep the Highest: S 6. Problem 12.08 Click here to read the eBook: Analysis of an Expansion Project NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $190,000, and it would cost another $38,000 to modify the equipment for special use by the firm. The equipment falls into the ACRS 3 year class and would be sold a ter 3 years for $47 500 The applicable de reaation rates are 3 % 45% 15%, and 7%. The equipment would require a $13,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $37,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40% a. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign. b. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent. In Year 1 In Year 2 $ In Year 3 $ c.ftheWAC is 10%, should the spectrometer be purchased? Select- Yes No Grade It Now Save & Continue Continue without saving