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company making plastic car parts buys new molding machines to expand its production capacity. The machines cost $ 3 million, with additional charges for delivery

company making plastic car parts buys new molding machines to expand its production capacity. The machines cost $3 million, with additional charges for delivery and installation totaling $42,490. Employees will have to be trained to use the new machines at the cost of $3. With the increased production, accounts payable will increase by $1, inventory will increase by $7, and accounts receivable will increase by $2 at the outset. These changes in the working capital will be recaptured at the end of the projects life of 5 years. The depreciable life of the machines is 10 years, and the company uses straight-line depreciation. The increased production will increase the sales revenue by $5 million and the costs (including depreciation) by $1,341,054 per year in each of the next 5 years. The company expects to sell the machines after five years for $2. The companys tax rate is 20.59%, and its cost of capital (the projects required rate of return) is 10.65%. Find the annual (operating) free cash flows in Year 1.

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