New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The...

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Finance

New-Project Analysis
The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,030,000, and it would cost another $16,500 to install it. Themachine falls into the MACRS 3-year class (the applicable MACRSdepreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and itwould be sold after 3 years for $632,000. The machine would requirean increase in net working capital (inventory) of $16,500. Thesprayer would not change revenues, but it is expected to save thefirm $433,000 per year in before-tax operating costs, mainly labor.Campbell's marginal tax rate is 30%. Cash outflows, if any, shouldbe indicated by a minus sign.
Do not round intermediate calculations. Round your answers tothe nearest dollar.
a. What is the Year-0 net cash flow? $
b. What are the net operating cash flows in Years 1, 2, and 3?Year 1: $ Year 2: $ Year 3: $
c. What is the additional Year 3 cash flow (i.e, the after-taxsalvage and the return of working capital)? $
d. If the project's cost of capital is 13 %, what is the NPV ofthe project? $ Should the machine be purchased? (yes or No)

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New-Project AnalysisThe Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,030,000, and it would cost another $16,500 to install it. Themachine falls into the MACRS 3-year class (the applicable MACRSdepreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and itwould be sold after 3 years for $632,000. The machine would requirean increase in net working capital (inventory) of $16,500. Thesprayer would not change revenues, but it is expected to save thefirm $433,000 per year in before-tax operating costs, mainly labor.Campbell's marginal tax rate is 30%. Cash outflows, if any, shouldbe indicated by a minus sign.Do not round intermediate calculations. Round your answers tothe nearest dollar.a. What is the Year-0 net cash flow? $b. What are the net operating cash flows in Years 1, 2, and 3?Year 1: $ Year 2: $ Year 3: $c. What is the additional Year 3 cash flow (i.e, the after-taxsalvage and the return of working capital)? $d. If the project's cost of capital is 13 %, what is the NPV ofthe project? $ Should the machine be purchased? (yes or No)