Calculating 'cash flows over the life'

Michael's Patisserie Company $($MICH$)$ is proposing to replace its old baking equipment with new

equipment. Baker's Delight will purchase the old baking equipment immediately for $$87,000.$

The new baking equipment costs $$250,000$ immediately. The new baking equipment is expected to

increase MICH's total yearly sales by $$50,000$ to $$425,000.$

MICH will sell new shares to partially fund the purchase of the new baking equipment, raising a total

of $$90,000.$

The new baking equipment is more efficient than the old equipment and is expected to reduce

MICH's annual operating costs to $$200,000$ from $$280,000.$

According to the tax office, the new baking equipment has an effective life of $20$ years. Assume the

company tax rate is $30\%.$

The old baking equipment incurs depreciation of $$12,000$ per annum, and has $20$ years until it is fully

depreciated. For internal management reporting, the new baking equipment will be depreciated

using a $12-$year useful life.

What are the 'cash flows over the life'?

$[$Describe and list separately each cash flow and the corresponding amount on a new line, as in

lecture and tutorial examples.$]$

$[$Provide the Cash flows over the life for one year only because the cash flows are the same during

each year of the project's life$].$

$[$Where applicable, show as much working out as possible, otherwise you may be penalised$].$