Yes.

However, the table and rules to create magical items are guidelines for gamemasters, not players. Players should be able to create anything they want as long as they have GM permission. The GM will decide if the pricing is right, if the item is unbalanced, or if the item does something that another item does and has a different price.

Many factors must be considered when determining the price of new magic items. The easiest way to come up with a price is to compare the new item to an item that is already priced, using that price as a guide.

Some GM's frown upon the idea of custom magic items made by players, and will strictly forbid it. While others will let them create anything they want and simply say yes or no to the result.

Quoting the core rulebook:

The correct way to price an item is by comparing its abilities to similar items (see Magic Item Gold Piece Values), and only if there are no similar items should you use the pricing formulas to determine an approximate price for the item.

Creating new magic items is an art

With that said, we need to know if there is anything that is similar to our infinite blasting wand that looks like a crossbow.

Most continuous effects have a limited per day use, with very few exceptions, such as:

• Lantern of Revealing (permanent invisibility purge, 30,000 gp)
• Goggles of Night (permanent darkvision, 12,000 gp)

Those items duplicate the effects of spells with a duration (not single use) and use the exact formula for continuous magic item effects:

• Spell level x caster level x 2,000 gp

• If a continuous item has an effect based on a spell with a duration measured in rounds, multiply the cost by 4. If the duration of the spell is 1 minute/level, multiply the cost by 2, and if the duration is 10 minutes/level, multiply the cost by 1.5. If the spell has a 24-hour duration or greater, divide the cost in half.

While others are command-activated and basically works as if the user were casting a spell himself, but have a limit of uses per day. The example given by the table is calculated as once per day use:

• Cape of the Mountebank (once per day dimension door, 10,800 gp)
• Boots of Teleportation (three times per day teleport, 49,000 gp)

However, there are examples of items that are command-word, but no limit of uses per day, such as:

• Ring of Blinking (at-will blink, 27,000 gp)

You will notice that the ring uses the exact formula given by the table:

• Spell level x caster level x 1,800 gp
• 4 * 9 * 1800 = 27,000 gp (the exact value of the ring)

So you can use that formula to price your blasting crossbow. Just keep in mind that first level spells are usually unbalanced for what they do and will often make unbalanced magic items due to their spell level ( 1 * 1 = 1 * effect cost), and are better used for limited uses or single use effects, or even better, wands.

So, if you want your crossbow to shoot Acid Arrows, simply check the spell level (2), the minimum caster level to cast the spell (3), and multiply by 1,800. The cost of that magic effect should be 10,800 gp.

The crossbow will use a Standard Action to "cast" the effect, cause 2d4 damage on a ranged touch attack, and last for 2 rounds after the initial hit (caster level 3).

And it can also shoot bolts.

As written, the bow creates its own ammunition "[w]hen you draw back its string and fire." As such, you cannot fire any other arrows you might happen to have on your person: the one the Moon Bow creates would get in the way.

That said, it would not be game breaking to allow the Moon Bow to fire magical arrows. Yes you will do extra damage but you are expending a magic item and a spell slot to do so.