Alpha Corporation is considering the purchase of a new machine for $ 300,000, which will

be depreciated on a straight-line basis over 5 years with no salvage value. In order to put this machine in operating order, it is necessary to pay installation charges of $ 30,000.

The new machine will replace an existing machine, purchased 3 years ago at a cost of $220,000 that is depreciated on a straight-line basis (with no salvage value) over its 10-year life (i.e., $22,000 per year depreciation). The old machine can be sold for $220,000 to a scrap dealer.

The company is in the 25 Percent tax bracket. The machine will require an increased investment in inventory of $ 15,000.

You are required to calculate the amount of Initial Investment with relevant Cash flows.