MINDIAP Search this cours Chapter Problems ht: Ch 13: End of Chapter Problems Assignment Score: 14.28% Submit Assignment for Grading Problem 13-07 (New Project Analysis) Question 7 of 7 Check My Work (1 remaining) eBook 1 Problem Walk-Through New-Project Analysis The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $71,000, and it would cost another $19,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $31,100. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481. Use of the equipment would require an increase in net working capital (spare parts Inventory) of $3,350. The machine would have no effect on revenues, but it is expected to save the firm $27,490 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 40%. Cash outflows and negative NPV value, 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 37 Do not include recovery of NWC or salvage value in Year 3's calculation here. Year 1: $ $ Year 2: Year 3: c. What is the additional cash flow in Year 3 from NWC and salvage? $ d. If the project's cost of capital is 10%, what is the NPV of the project?. Should the chromatograph be purchased? -Select- Check My Work (1 remaining) Problem 13-07 (New-Project Analysis Save Submit Assignment for Grading