Spear Company is considering a $5,500,000 asset investment that has a 4-year service life and a $500,000 salvage value. The investment is expected to produce annual savings in cash operating costs of $960,000 and will require a $350,000 overhaul in year 3, which is fully-deductible for tax purposes. Spear uses the net-present-value method to analyze investments. Asset investments are depreciated by the straight-line method, ignoring salvage values in related computations.

A. Ignoring income taxes, determine the (pre-discounted) cash-flow amounts that would be used in a net-present-value analysis for below. (Negative amounts should be indicated by a minus sign.) 1. Asset acquisition 2. Annual savings in cash operating costs 3. Annual straight-line depreciation 4. Year 3 overhaul 5. Year 4 asset disposal