Check My Work (3 omilor) eBook You must evaluate a proposal to buy a nen willing machine. The purchase price of the willing machine, including shipping and instelletion costs, $173,000, and the equipment will be fully depresieted at the time of purchase. The machine would be sold efter 3 years for $64,000. The mechire would require a 57,900 increase in niet operating working capital increased inventory less increased counts payable). There nould be no effect on reverues, but precex labor costs would dedine by $33,000 per year. The marginal tax rate is 25%, and the WACC is 8%. Also, the firm spent 54,500 last year investigeting the feasibility of using the machine. a. How should the $4,500 spent last year be handled? 1. The cost of research is an incrementalesh now and should be induded in the areysis. II. Only the tak effect of the research expenses should be included in the analysis 111. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be induded in the initial Investment autlay. TV Last year's expenditure is considered an opportunity cost and does not represent an incremental desh Now. Hence, it should not be induded in the anelysis. V. Last year's expenditure is cursidered a cunk custard coes not represent an incremental cash flow. Hence, it should rot be nduded in the areysis h. What is the initial Investment autlay for the machine for capital budgeting purposes after the 100% bonus depreciation is coraldered, that is what the Year o project at how? Enter your answer as a positive valuc. Round your answer to the nearest dallar. $ c. What are the project's annual cash fons during Years 1, 2, and 3? Do not rourd intermediate calculations. Round your answers to the nearest dollar Year 15 Yaar 2: Year 3: d. Should the machine be purchased No Check My Work (3 remaining) O rany