Mahle Inc. is interested in purchasing a new 3D printing prototyping machine capable of printing large size designs. They will purchase the system today for $500,000 and will be able to print 500 designs per year for the next 6 years. Annually, it will cost $55,000 to operate the printer and another $30,000 to maintain the equipment in good working condition. In addition, the manufacturer of the equipment recommends a significant machine overhaul every three years which will cost $42,000 for each overhaul. Purchasing this system will reduce the amount of outsourcing required by 85% each year, or: Years 1-3: $175,000 savings, Years 4-6: $223,000 savings. They will also generate new revenue from this printer as follows: Year 1: $26,000, Year 2: $28,000, Year 3: $38,500, Year 4: $44,000, Year 5: $51,000, Year 6: $53,000. At the end of 6 years the equipment manufacturer will buy back the old equipment for 5% of the purchase price as an incentive for purchasing a newer model. Which of the following best represents the net cash flows in years 2 and 6 of the project?

Year 2 = $175,000; Year 6 = $276, 000

Year 2 = $93,000; Year 6 = $149, 000

Year 2 = $500,000; Year 6 = $188, 000

Year 2 = $118,000; Year 6 = $174, 000