Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash flows, and depict the cash flows on a time line.

a$.$ A project that requires an initial investment of $$120,000$ and will generate annual operating cash inflows of $$25,000$ for the next $18$ years. In each of the $18$ years, maintenance of the project will require a $$5,000$ cash outflow.

b$.$ A new machine with an installed cost of $$85,000.$ Sale of the old machine will yield $$30,000$ after taxes. Operating cash inflows generated by the replacement will exceed the operating cash inflows of the old machine by $$20,000$ in each year of a $6-$year period. At the end of year $6,$ liquidation of the new machine will yield $$20,000$ after taxes, which is $$10,000$ greater than the after$-$tax proceids expected from the old machine had it been retained and liquidated at the end of year $6.$

c$.$ An asset that requires an initial investment of $$2$ million and will yield annual operating cash inflows of $$300,000$ for each of the next $10$ years. Operating cash outlays will be $$20,000$ for each year except year $6,$ when an overhaul requiring an additional cash outlay of $$500,000$ will be required. The asset's liquidation value at the end of year $10$ is expected to be zero.

erm Investment Decisions

Covol would retain an existing overhead crane, which it had planned to sell for its $$180,000$ market value. Although the crane was not needed with the old machine tool, it would be used to position raw materials on the new machine tool.