MSC Marchining is reviewing of four year project to cut prochuction costs. The purchase of a new. machine at $395,000 is estimated to result in $144,000 in annual pre-tax cost staings. The machine falls in the MACRS five-year class and will have a market value of 545,000 at the end of the project. An initial investment of $23,000 is also required in spare parts inventory, If the comparv's tax rate is 220k, projected cash flow at the outset (year 0 ) will be The projected cash flow in year 1 witl be 5 The net salvage cash flow associated with sale of the machine at the end of the project will be $. MACRS table for 5-yr class