Question: The Campbell Company is considering adding a robatic paint sprayer to its production line. The sprayer's base price is $1,090,000, and it would cost another

The Campbell Company is considering adding a
The Campbell Company is considering adding a robatic paint sprayer to its production line. The sprayer's base price is $1,090,000, and it would cost another $17,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $569,000. 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 $16,000. The sprayer would not change revenues, but it is expected to save the firm $393,000 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 calculatiens. Round your answers to the nearest dollar. a. What is the Year-0 net cash flow? $ 1123500 b. What are the net operating cash flows in Years 1, 2, and 37 Year 1:% 287033 Year 2:% 417821 Year 3:% 335755 c. What is the ad nal Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)? $ d. If the project's cost of capital is 11%, what is the NPV of the project? $ Should the machine be purchased

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