Operating cash flow

The BMI Corporation is analyzing the proposed purchase of a new machine for $75,000. The proposed machine has an estimated economic life of four years but will be treated as three-year MACRS property for depreciation purposes. The machine will increase the firm's capacity, and it is expected to contribute $35.000 annually to earnings before depreciation and taxes. The firm is in a 32% tax bracket and estimates its cost of capital to be 16%. Calculate the first year's cash flow from this investment. (MACRS tables are above.)