ghiberti industries is reviewing a five year project to cut production costs. the purchase of a new machine at 500000 is estimated to result in 150000 in annual pre tax cost savings. The machine falls in the MARCS five year class and will have a market value of 50,000 at the end of the project. An initial investment of 35,000 in spare parts is required. If the companys tax rate is 22%, projected cash flow at the outset (year 0) will be ? The projected cash flow in year 1 will be ? The net salvage cash flow associated with sale of the machine at the end of the project will be ???

Year 1 20% depreciation Year 2 32% depreciation Year 3 19.2% depreciation Year 4 11.52% depreciation Year 5 11.52% depreciation Year 6 5.76% depreciation