Kinston Industries is considering investing in a machine that willcost $125,000 and will last for three years. The machine will increase revenuesby $120,000 each year. The cost of goods sold willbe 50% of revenues and the net working capital requiredequals 10% of incremental revenues. The appropriate cost of capitalis 10% and Kinston is inthe 35% tax bracket.

 

The present value of incremental cash flows associated with capital assets and net working capital is?