PLEASE HELP

You must evaluate a proposal to buy a new malling machine. The purchase price of the milling machine, including shipping and installation costs, is sir.000, and the equipment will be fully depreciated at the time of purchase. The machine would be sold after 3 years for $64,000. The machine would require a 54,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decine by 558,000 per year. The marginal tax rate is 25%, and the WACC is 9%. Aso, the firm spent $4,500 last year invertigating the feasibility of using the machine. a. How should the $4,500 spent last year be handled? 1. Only the tax effect of the research expenses should be included in the analyali. 11. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be inctuded in the inkiai investment outley. III. Last year's expenditure is considered an opportunity cost and does not represent an incremental cash flow. Hence, it should not be induded in the analysib. IV. Last year's expenditure is considered a sunk cest and does not represent an incremental cash now. Hence, it should not be induded in the analyals, V. The cost of research is an incremental cash flow and should be ineluded in the analyais. b. What is the initial investment outlay for the machine for capital budgeting purposes after the 10ow benus degreciation is considered, that in, what is the Yoar 0 prolect cash flow? Enter your ariswer as a positive value. Round your answer to the nearest dollar. 3 c. What are the project's annual cash flows during Years 1,2 , and 3 ? Do not round intermediate calculations, Round your answers to the nearest dollar. Year 1 it 5 Year 2:5 Year 3: 5 d. Should the machine be purchased