The Thorpe Corporation will purchase a $50,000 piece of production machinery with an estimated useful life of five years. The new machine is expected to allow an increase in sales of $80,000 per year, while increased incremental costs amount to $45 ,000 per year. The firm is in a 25 percent income tax bracket. Complete the following table to determine the first-year cash flow effect of the investment.

Increased sales ...............................__________
Increased costs................................__________
EBAT ................ .. .. .. .. ......... .. .. . .__________
Amortization ............. . .. .. . ...... .. . .__________
Earnings before taxes.......................__________
Taxes ..................... ........................ .__________
Earnings after taxes............................__________
Amortization .......... .. .. .. .. ......... . . .__________
Net cash flow......................................__________