INCOME TAXES. Eastern Cola is considering the purchase of a special- purpose bottling machine for $70,000. It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates the following savings in cash operating costs: Year Amount 1 $30,000 2 25,000 3 20,000 4 15,000 Total $90,000 Eastern Cola uses a required rate of return of 20% in its capital budgeting decisions. Ignore income taxes in your analysis. Assume all cash flows occur at year-end except for initial investment amounts.