You must evaluate a proposal to buy a new machine. The base price is $123,000, and shipping and installation costs would

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You must evaluate a proposal to buy a new machine. The base
price is $123,000, and shipping and installation costs would add
another $6,000. The machine falls into the MACRS 3-year class, and
it would be sold after 3 years for $67,650. The applicable
depreciation rates are 33%, 45%, 15%, and 7%. The machine would
require a $7,500 increase in net operating working capital
(increased inventory less increased accounts payable). There would
be no effect on revenues, but pretax labor costs would decline by
$59,000 per year. The marginal tax rate is 35%, and the WACC is
10%. Also, the firm spent $4,500 last year investigating the
feasibility of using the machine.
What is the initial investment outlay for the machine for
capital budgeting purposes, that is, what is the Year 0 project
cash flow? Enter your answer as a positive value. Round your answer
to the nearest cent.
What are the project's annual cash flows during Years 1, 2, and
3? Do not round intermediate calculations. Round your answers to
the nearest cent.
yr 1 ? yr 2? yr 3?