Regal enterprises are considering the purchase of a new embroidery machine. It is expected to generate additional sales of $400,000 per year. The machine will cost $295,000 plus $3,000 to install it. The embroidered will save $12,000 in labor expenses each year. Regal is in the 34% income tax bracket. The machine will be depreciated on a straight-line basis over five years (it has no salvage value). The embroiderer will require annual operating expenses of $136,000. What is the annual operating cash flow that the machine will generate?

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