Smart Cars, Inc. is considering launching a new product in the coming year. The new project requires $6,000,000 capital investments at time zero, which will be depreciated based on the 3-year MACRS shown below. This project is expected to generate new sales of $5 million each year with a $2 million cost a year. What is the operating cash flow for year 1 and 2, if the firm’s tax rate is 40%?

3 Year MACRS Percentage Year 1 33% 45% 3 15% 4 7% total 100%