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Initial purchase cost of machines Useful life from acquisition date (years) Expected annual cash operating costs Variable cost per can of jam Old Machine

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Initial purchase cost of machines Useful life from acquisition date (years) Expected annual cash operating costs Variable cost per can of jam Old Machine $ 150,000 $ 8 New Machine 190,000 5 $ Total fixed costs $ 0.25 $ 25,000 $ 0.19 24,000 Depreciation method for tax purposes MACRS, 7 year asset MACRS, 5 year asset Estimated disposal value of machines January 1, 2014 December 31, 2018 es es $ 68,000 $ 190,000 $ 12,000 $ 22,000 Expected cans of jam produced and sold each year 475,000 475,000

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