proportional sales income and operating costs of the replacement machine, which is expected to have a useful life of three years: Initial investment $500,000 Cash flows Year 1 Sales income $280,000 $330,000 $390,000 Operating costs $100,000 $120,000 $ 130,000 2 3 The company appraises capital investment projects using a cost of capital of 10% per annum. What is the NPV of this machine? The Discount factor of 10% is as follows Year DF 0 1.000 W 1 0.909 2 0.826 3 0.751