Question: will rate the answer The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $910,000, and
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $910,000, and it would cost another $18,000 to install it. The machine falls into the MACRS 3 -year class (the applicable MACRS depreciation rates are 33.33%,44.45%,14.81%, and 7.41% ), and it would be sold after 3 years for $555,000. The machine would require an increase in net working capital (inventory) of $20,000. The sprayer would not change revenues, but it is expected to save the firm $373,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. a. What is the Year 0 net cash flow? \{ b. What are the net operating cash flows in Years 1,2, and 32 Do not round intermediate caiculations. Round your answers to the nearest dollar. Year 1 Year 2 Year 3 c. What is the additional Year 3 cash flow (i.e, the after-tax salvage and the return of working capital)? Do not round intermediate calculations. Round your answer to the nearest dollar. d. If the project's cost of capital is 15%, what is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar
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