Questions Problem 11-06 (New Project Analysis) Question 404 2 3. Check My Work 4 eBook Problem Walk-Through New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $830,000, and it would cost another $22,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $564,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $19,000. The sprayer would not change revenues, but it is expected to save the firm $334,000 per year in before-tax operating costs, mainly labor. Campbell's 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 Year-O net cash flow? $ -871,000 b. What are the net operating cash flows in Years 1, 2, and 3? Year 1: $ 2,579,742.5 Year 2: $ 2,603,428.5 Year 3: $ 2,540,295.3 c. What is the additional Year-3 cash flow (le, after-tax salvage and the return of working capital) $ d. If the project's cost of capital is 13%, what is the NPV of the project? $ Should the machine be purchased? Yes Hide Feedback Partially Correct 3 RA 21