You have been asked by the president of your company to evaluatethe proposed acquisition of a new spectrometer for the firmsR&D department. The equipments basic price is $70000 and itwould cost another $15000 to modify it for special use by yourfirm. The spectrometer which falls into the MACRS 3-years classwould be sold after 3 years for $30000. Use of the equipment wouldrequire an increase in net working capital (spare parts inventory)of $4000. The spectrometer would have no effect on revenues butit is expected to save the firm $25000 per year in before-taxoperating costs mainly labor. The firms marginalfederal-plus-state tax rate in 40 per cent.a. What is the net cost of the spectrometer? (that is what is theYear 0 net cash flow?)b. What are the net operating cash flows in Years 1 2 and 3?c. What is the additional (non-operating) cash flow in Year 3?d. If the projects cost of capital is 10 percent should thespectrometer be purchased?