Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has just acquired new workstations and modeling software for its two "Valley of the Sun" design facilities, at a cost of $455,000 per site. This cost includes the hardware, software, transportation, and installation costs. Additional software training has been purchased at a cost of $27,000 per site. The estimated MV for each system during the fourth year is expected to be 6% of the system cost, at which time the systems will all be sold. The company believes that use of the new systems will enhance their circuit design business, resulting in a total increase in annual income of $1,030,000. The engineering design manager wants to determine the tax implications of this purchase. He estimates that annual operating and maintenance costs on the systems will be approximately $250,000 (all sites combined). The company's marginal effective tax rate is 31% and the MACRS depreciation method (with a five year GDS recovery period) will be used. Determine the after-tax cash flows for this project. If the after-tax MARR is 17% per year, would you recommend this investment?

Determine the after-tax cash flows for each year.