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Click here to read the eBook: Analysis of an ExpansionProjectNEW PROJECT ANALYSISYou must evaluate the purchase of a proposed spectrometer forthe R&D department. The base price is $290,000, and it wouldcost another $72,500 to modify the equipment for special use by thefirm. The equipment falls into the MACRS 3-year class and would besold after 3 years for $72,500. The applicable depreciation ratesare 33%, 45%, 15%, and 7%. The equipment would require a $5,000increase in net operating working capital (spare parts inventory).The project would have no effect on revenues, but it should savethe firm $53,000 per year in before-tax labor costs. The firm'smarginal federal-plus-state tax rate is 40%.What is the initial investment outlay for the spectrometer,that is, what is the Year 0 project cash flow? Round your answer tothe nearest cent. Negative amount should be indicated by a minussign.$[ ]What are the project's annual cash flows in Years 1, 2, and 3?Round your answers to the nearest cent.In Year 1 $[ ]In Year 2 $[ ]In Year 3 $[ ]If the WACC is 14%, should the spectrometer be purchased?yes orno