Question: Please show ALL calculations Question 2. (15 points) Tundra Tots is evaluating the proposed acquisition of new equipment at a cost of $250,000.In addition the

Please show ALL calculations

Question 2. (15 points) Tundra Tots is evaluating the proposed acquisition of new equipment at a cost of $250,000.In addition the equipment would require modifications at a cost of $20,000 plus shipping costs of $3,000.The equipment falls into the MACRS 3-year class, and will be sold after 3 years for $25,000.The equipment would require increased inventory of 4,000.The equipment isexpected to save the company $25,000 per year in before-tax operating costs.The company's marginal tax rate is 21 percent and its cost of capital is 12 percent.

a.What is the cash outflow at Time 0?

b.What are the net operating cash flows in years 1, 2, and 3?

c.Calculate the non-operating terminal year cash flow.

d. Calculate net present value.Should the machine be purchased?

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