Pinnacle Products Inc. is comparing the cash flows generated by its current production facility with the estimated cash flows that may be generated by a new facility. The Finance Department at Pinnacle has gathered the following information.

• Current annual sales are $1,200,000. If the new facility comes on line, annual sales are expected to to be 20% higher.
• Current annual operating costs are $900,000. If the new facility comes on line, annual operating costs are expected to be 10% higher.
• Total annual Depreciation Expense at the current production facility is $100,000. Annual Depreciation Expense is expected to to be $25,000 higher if the new production facility comes on line. Depreciation Expense is not included in the annual operating costs described above.
• The firms marginal tax rate is 35%.

Given this information, please calculate the following:

a. Pinnacle Products current annual after-tax operating cash flow based on operations at the current production facility.

b. Pinnacle Products proposed annual after-tax operating cash flow at the new production facility.

c. The incremental annual operating cash flow that will occur if Pinnacle invests in the proposed new production facility.