Holmes Manufacturing is considering a new machine that costs $$270,000$ and would reduce pretax manufacturing costs by $$90,000$ annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $$23,000$ at the end of its $5-$year operating life. Net operating working capital would increase by $$25,000$ initially, but it would be recovered at the end of the project's $5-$year life. Holmes's marginal tax rate is $25\%,$ and an $11\%$ WACC is appropriate for the project.

Calculate the project's NPV$.$ Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent.

$

Calculate the project's IRR. Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

Calculate the project's MIRR. Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

Calculate the project's payback. Do not round intermediate calculations. Round your answer to two decimal places.

years

Assume management is unsure about the $$90,000$ cost savings$-$this figure could deviate by as much as plus or minus $20\%.$ What would the NPV be under each of these situations? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

$20\%$ savings increase: $ $20\%$ savings decrease: $You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $$220,000,$ and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after $3$ years for $$50,000.$ The equipment would require a $$5,000$ increase in net operating working capital $($spare parts inventory$).$ The project would have no effect on revenues, but it should save the firm $$79,000$ per year in before$-$tax labor costs. The firm's marginal federal$-$plus$-$state tax rate is $25\%.$

a$.$ What is the initial investment outlay for the spectrometer after bonus depreciation is considered, firmthat is$,$ what is the Year $0$ 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 $1$: $

Year $2$: $

c$.$ If the WACC is $13\%,$ should the spectrometer be purchased?

Yes or No