Question: *CLEARLY SHOW ANSWER - WILL UPVOTE FOR CORRECT RESPONSE* New Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production

*CLEARLY SHOW ANSWER - WILL UPVOTE FOR CORRECT RESPONSE*
*CLEARLY SHOW ANSWER - WILL UPVOTE FOR CORRECT RESPONSE* New Project Analysis

New Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,120,000, and it would cost another $19,500 to install it. The machine falls into the MACRS J-year class, and it would be sold after 3 years for $650,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $18,500. The sprayer would not change revenues, but it is expected to save the firm $330,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (lenore the half-year convention for the straight line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to the nearest dollar a. What is the Year-O net cash flow? b. What are the net operating cash flows in Years 1, 2, and 3? Year 1:5 Year 2:$ Year 3:5 c. What is the additional Year 3 cash Now (le, the after tax salvage and the return of working capital? $ d. If the project's cost of capital is 11%, what is the NPV of the project? $ Should the machine be purchased? Select

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