Initial cost for 6 buses is $600,000 with life expectancy of 5yrs calculation of net cash flows from year 1 to 5 in tabular form is as follow: Year 1 Year 2 Year 3 Year 4 Year 5 revenue 330,000 330,000 350,000 380,000 400,000 less - expenses : driver cost 33,000 35,000 36,000 38,000 40,000 repair and main. 8,000 13,000 15,000 16,000 18,000 other costs 130,000 135,000 140,000 136,000 142,000 depreciation 120,000 120,000 120,000 120,000 120,000 =operating income 39,000 27,000 (revenue - expenses) 39,000 70,000 80,000 add : depreciation 120,000 120,000 120,000 120,000 120,000 =net cash flows 159,000 147,000 159,000 190,000 200,000