line that is becoming obsolete. To begin manufacturing them, the company will have to invest $$1,850,000$ in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $$746,000$ per year for the next $13$ years. The company has determined that the existing line could be sold to a competitor for $$254,000.$

a$.$ How should the $$1,040,000$ in development costs be classified?

b$.$ How should the $$254,000$ sale price for the existing line be classified?

c$.$ What are all the incremental cash flows for years $0$ thru $13?($Note: Assume that all of these numbers are net of taxes.$)$