Indigo Company is considering a capital investment of $509,540 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash flows are expected to be $48,000 and $146,000, respectively. Indigo has a 12% cost of capital rate, which is the minimum acceptable rate of return on the investment.