CSC is evaluating new project to produce encapsulators.The initial investment in

plant and equipment is $$500,000.$ Sales of encapsulators in year $1$ are forecasted

at $$200,000$ and costs at $$100,000.$Both are expected to increase by $10\%$ a year.

Profits are taxed at $30\%.$ Working capital in each year consists of inventories of

raw materials and is forecasted at $20\%$ of sales in the following year. The project

will last five years and the equipment at the end of this period will have scrap

value of $$50,000$ but could be sold for $$30,000.$ For tax purposes the equipment

can be depreciated straight line over these years.

Forecast cash flows from the project.