Keep the Highest 115 Attempte: 0 S. 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 $80,000, and it would cost another $20,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $28,000. The applicable depreciation rates are 334,45%, 15%, and 7%. The equipment would require a $6,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $65,000 per year in before-tex labor costs. The firm's marginal federal-plus- state tax rate is 40%. a. What is the initial investment outlay for the spectrometer, that is, what is the Year O project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign b. What are the project's annual cash flows in Years 1, 2, and 37 Round your answers to the nearest cent. In Year 1$ In Year 2$ In Year 35 C. If the WACC IS 12%, should the spectrometer be purchased? Select