A new assembly machine costs $15,000 and is expected to have a 5

year life. The drill press will be

depreciated on a straight

-

line basis over 5 years to a zero estimated salvage value. This machine is

expected to reduce the firms cash operating costs by $5,500 per year. If the firm is in the 40 percent

marginal tax br

acket, determine the annual net cash flows generated by the drill press.