It is required to install a new computer control system. This new computer control system could be purchased at a cost of $125,000. The project working life of this system is 05 years with a salvage value of $50,000. The working capital investment is $23,331 for this project. The annual labor savings due to this project will be $100,000.

Additional annual expenses involve labor expense of $20,000, Material expense of $12,000 & Overhead expense of $8,000.

1. Use Straight Line Depreciation method to calculate the depreciation amount for each year.
2. Develop the income statement for this project given an applied income tax of 40%.
3. Develop the cash flow statement for this project.
4. Draw the cash flow diagram for this project.
5. Is this project justifiable at an MARR of 15%?