Evaluate two machines.

Machine A costs $55,000 per year has a five year life, and costs $15,000 pear year to operate. The machine will be depreciated using straight line and the relevant discount rate is 10%. The machine will have a salvage value of $8,500 at the end of the projects life. The firm has a tax rate of 21%.

Year Project A Project B

0 -55,000 -68,000

1 22,200 34,000

2 43,000 37,000

3 15,000 25,000

Calculate the operating cash flow in year 1. (Enter as a negative value)