A firm is evaluating a new capital project. The firm spent $45,000 on a market study and $30,000 on consulting three months ago. If the firm approves the project, it will spend $800,000 on new machinery, $60,000 on installation, and $10,000 on shipping. The machine will be depreciated via simplified straight-line depreciation over its 12-year life. The expected sales increase from this new project is $500,000 a year, and the expected incremental expenses are $200,000 a year. In order to start this new project, the company will invest $100,000 in working capital. The marginal tax rate is 40%. What is the annual net cash flow per year from this project?

• $209,000
• $211,500
• $206,667
• $212,333
• $136,500