Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will require the purchase of land at a cost of $120,000. A new building will cost $110,000 and will be depreciated on a straight-line basis over 10 years to a salvage value of $0. Actual land salvage at the end of 10 years is expected to be $240,000. Actual building salvage at the end of 10 years is expected to be $150,000. Equipment for the facility is expected to cost $250,000. Installation costs will be an additional $50,000 and shipping costs will be $5,000. This equipment will be depreciated as a 7-year MACRS asset. Actual estimated salvage at the end of 10 years is $0. The project will require net working capital of $65,000 initially (year 0), an additional $50,000 at the end of year 1, and an additional $50,000 at the end of year 2. The project is expected to generate increased EBIT (operating income) for the firm of $90,000 during year 1. Annual EBIT is expected to grow at a rate of 3 percent per year until the project terminates at the end of year 10. The marginal tax rate is 40 percent. UseTable 9A-3andTable Ito answer the questions below. Round your answers to the nearest dollar.

Compute the initial net investment.

$

Compute the annual net cash flow from the project in year 10.

$