The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's...

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The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$910,000, and it would cost another $24,500 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 $537,000. The machine would requirean increase in net working capital (inventory) of $17,500. Thesprayer would not change revenues, but it is expected to save thefirm $494,000 per year in before-tax operating costs, mainly labor.Campbell's marginal tax rate is 35%.
What is the Year 0 net cash flow? __$
What are the net operating cash flows in Years 1, 2, and 3? Donot round intermediate calculations. Round your answers to thenearest dollar.
Year 1 $
Year 2 $
Year 3 _$
What is the additional Year 3 cash flow (i.e, the after-taxsalvage and the return of working capital)? Do not roundintermediate calculations. Round your answer to the nearest dollar._$
If the project's cost of capital is 15 %, what is the NPV of theproject? Do not round intermediate calculations. Round your answerto the nearest dollar. ____$
Should the machine be purchased?
Yes or no

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The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$910,000, and it would cost another $24,500 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 $537,000. The machine would requirean increase in net working capital (inventory) of $17,500. Thesprayer would not change revenues, but it is expected to save thefirm $494,000 per year in before-tax operating costs, mainly labor.Campbell's marginal tax rate is 35%.What is the Year 0 net cash flow? ______$What are the net operating cash flows in Years 1, 2, and 3? Donot round intermediate calculations. Round your answers to thenearest dollar.Year 1______ $Year 2 ______ $Year 3 _______$What is the additional Year 3 cash flow (i.e, the after-taxsalvage and the return of working capital)? Do not roundintermediate calculations. Round your answer to the nearest dollar._______$If the project's cost of capital is 15 %, what is the NPV of theproject? Do not round intermediate calculations. Round your answerto the nearest dollar. ________$Should the machine be purchased?Yes or no