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

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New-Project Analysis
The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,090,000, and it would cost another $16,500 to install it. Themachine falls into the MACRS 3-year class, and it would be soldafter 3 years for $582,000. The MACRS rates for the first threeyears are 0.3333, 0.4445, and 0.1481. The machine would require anincrease in net working capital (inventory) of $14,500. The sprayerwould not change revenues, but it is expected to save the firm$387,000 per year in before-tax operating costs, mainly labor.Campbell's marginal tax rate is 25%. (Ignore the half-yearconvention for the straight-line method.) Cash outflows, if any,should be indicated by a minus sign. Do not round intermediatecalculations. Round your answers to the nearest dollar.
What is the Year-0 net cash flow?
$
What are the net operating cash flows in Years 1, 2, and 3?
What is the additional Year-3 cash flow (i.e, the after-taxsalvage and the return of working capital)?
$
If the project's cost of capital is 14%, what is the NPV of theproject?
$
Should the machine be purchased?
-Select-YesNo