Question: New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $850,000, and it would

 New-Project Analysis The Campbell Company is considering adding a robotic paint

New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $850,000, and it would cost another 516,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $550,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in networking capital (inventory) of $14,500. The spoer would not change revenues, but it is expected to save the firm $375,000 per year in before tax operating costs, mainly labor. Campbells marginal tax rate is 25% (ignore 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 YearO net cash flow? $ -882000 1. What are the net operating cash flows in Years 1, 2, and 3? Year 115 353409 Year 2:5 377484 Year 3:5 c. What is the additional Year 3 cash flow (le the after-tax savage and the return of working capita!)? 444543 d. If the project's cost of capital 14%, what is the NPV of the project? 5 230002 Should the machine be purchased

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