6. McDonald's is considering the purchase of a new equipment. The equipment costs $360,000, and an additional $40,000 is needed to install it. The equipment will be depreciated straight-line to zero over a five-year life. The equipment will generate no additional revenues, but it will reduce cash operating expenses by $140,000 annually. The equipment will be sold for $120,000 after five years. An inventory investment of $60,000 is required during the life of the investment. McDonald's is in the 40 percent tax bracket.

a. What is the McDonald's net investment outlay? (1 points)

b. What is McDonald's incremental annual after-tax operating cash flow? (1 points)

c. What is the terminal year after-tax nonoperating cash flow at the end of year five? (1 points)