The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $970,000, and it would cost another $19,500 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 $617,000. The machine would require an increase in net working capital (inventory) of $15,000. The sprayer would not change revenues, but it is expected to save the firm $473,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar. What is the Year-0 net cash flow

Year -0 net cash flow = -$ 1,004,500 (Cash outflow)

Explanation:

Sprayer's base price = -$970,000

Installation cost = -$19,500 ( cash outflow)

In investment analysis, increases in working capital are viewed as cash outflows

Increase in net working capital = -$15,000 (cash outflow)

Year-0 net cash flow = Base Price + Installation cost + Increase in net working capital

Year-0 net cash flow = (-970,000) + (-19,500) + (-15,000)

Year-0 net cash flow = -970,000 - 19,500 - 15,000

Year -0 net cash flow = -$ 1,004,500 (Cash outflow)

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).

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