Si 12-8 30s NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $140.000, and it would cost another $30,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 796, as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 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? Answer ood refr A-z b. What are the project's annual cash flows in Years 1, 2, and 3? Answer C. If the WACC is 12%, should the isions and a spectrometer be purchased? Explain