NEW PROJECT ANALYSIS LABS Project You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $220,000, and it would cost another 544,000 to modify the equpment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $99,000. The applicable depreciation rates are 37, 45,15, and 7%. The equipment would require a $10,000 Increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should see the firm $53,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%. a. What is the initial investment outlay for the spectrometer, that is what is the Year O project cash flow Round your answer to the nearest Cint. Neqative amount should be indicated by a minus sign. b. What are the project's annual cash flows in Years 1, 2, and 37 Round your answers to the nearest cent. In Year 15 In Year 2 In Year 3$ c. If the WACC is 14%, should the spectrometer be purchased? -Select- 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 $220,000, and it would cost another $44,000 to modity the cupment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $99,000. The applicable depreciation rates are 33% 45%, 15% and 7%. The equipment would require a $10,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $53,000 per year in before-tax 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 project cash flow? Round your answer to the nearest cnnt. Negative amount o 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 19 In Year 25 In Year 35 c. If the WACC is 14%, should the spectrometer be purchased? -Select