In the following After-Tax Cash Flows, where should the government's $1.5 million grants be?

EXHIBIT 12.2 After-Tax Cash Flow Data MENDOZA COMPANY After-Tax Cash Flow Data Machine Purchase Decision (000s) Years 0 1 2 Project Initiation Net cost of new machine(a) $(480.00) Commitment of net working capital (200.00) Net initial cash outflow, after tax $(680.00) Project Operation Cash revenues $1.000.00 $1.000.00 $1,000.00 $1,000.00 Operating expenses: Cash items(b) 783.33 733.33 733.33 733.33 Depreciation(C) 120.00 120.00 120.00 120.00 Total operating expenses 903,33 853.33 853,33 853.33 Pretax operating income 96.67 146.67 146.67 146.67 Income taxes on operating income 38.67 58.67 58.67 58.67 After-tax operating income 58.00 88.00 88.00 88.00 Plus: Noncash expenses (depreciation-see above) 120.00 120.00 120.00 120.00 After-tax cash operating income $ 178.00 $ 208.00 $ 208.00 $ 208.00 Project Disposal Net working capital released (i.e., recovered) $ 200.00 After-tax proceeds from sale of machine(d) 3.00 After-tax employee relocation expenses() (90.00) Net cash flow, after tax, at project disposal $ 113.00 Net (after-tax) cash flows ($680) $178 $208 $208 $321