Michele operates a local tourist agency. He has been using an Olivetti personal computer (PC) for several years and believes it is time to buy a new one. He would like to know the operating cash flows associated with the replacement of the old PC. The following data are available:

There are 5 years of remaining useful life on the old PC.

The old PC has a zero book value.

The new PC is expected to last 5 years.

Michele will follow a straight-line depreciation for the new PC.

Depreciation value of the new PC is €1,500.

He is subject to a 24% tax rate.

The new PC is expected to be more efficient and durable than the previous one and can result in reduced operating expenses of €500 per year.

Michele will buy an antivirus software for the PC that calls for annual payments of €20.

Create an operating cash flow statement for the replacement of Michele’s Olivetti personal computer. Show the operating cash flow for the next 5 years.