C. A proposal to buy a helicopter. The machine was expensive and, counting additional training and licensing requirements, would cost $40,000 a year to operate. However, the versatility that the helicopter was expected to provide would generate over $1.5 million in additional revenue, and it would give the company access to a wider market as well. (See Table 3 for details) Table 3 Financial analysis of Project C: Add a helicopter to the company's fleet Initial Year I Year 2 Year 3 Year 4 Year 5 Expenditures Net cost of new helicopter $800,000 Additional revenue $100,000 $200,000 $300,000 $450,000 $600,000 Additional operating costs 40,000 40,000 40,000 40,000 40,000 Depreciation 120,000 176,000 168,000 168,000 168,000 Net increase in income (60,000) (16,000) 92,000 242,000 392,000 Less: Tax at 33% 0 0 30,360 79,860 129,360 Increase in aftertax income ($60,000) ($16,000) $61,640 $162,140 $262,640 Add back depreciation $120,000 $176,000 $168,000 $168,000 $168,000 Net change in cash ow ($800,000) $60,000 $160,000 $229,640 $330,140 $430,640