ABC Company is considering the purchase of new equipment. The following information is relevant to the decision:

• The cost of the new machine is $220,000.
• Installation will cost $10,000.
• The company spent $10,000 on a market analysis two months ago.
• The project will require an immediate increase in working capital of $10,000; the working capital will be fully recaptured at the end of the life of the project.
• The project will increase annual revenues by $125,000 and annual operating costs by $45,000.
• The project has an estimated life of five years.
• The machine will be depreciated via straight-line depreciation to a salvage value of $0 over the five-year life of the asset.
• Realizable salvage value in five years is $50,000.
• The cost of capital is 14%, and the marginal tax rate is 34%.
• The old machine has a book value of $0.
• The old machine will be thrown away at no cost.

What is the initial outlay of the project?

What is the total cash flow for year 1?

What is the terminal cash flow of the project?