SteelTech will purchase new equipment for $1,500,000.The The new equipment will be used to build computer chips in a building SteelTech purchased eight years ago for $4,200,000.The building will be retooled for the new project at a cost of $500,000, which includes building permit fees of $25,000.

The purchased equipment will be depreciated using Modified Accelerated Cost Recovery System (MACRS) depreciation schedule (see below). The projected revenue for year 1 is $550,000.Subsequent year's revenues will increase by eight percent of the preceding year's revenues (i.e., year 2 revenues equals 1.08 *$550,000).This expansion project will result in an annual loss of revenues from an existing manufacturing operation of $100,000.Operating expenses (excluding depreciation and amortization) is estimated at 20 percent of net revenues.Operating net working capital will rise by $250,000 and $300,000 in years 1 and 2, respectively.Annual interest expense is fixed at $35,000.

MACRS Schedule

Year 1: 33.33%

Year 2: 44.45%

Tax Rate: 40%

What is the project's Free Cash Flows (FCF) for years 1 and 2? (Note: Do not subtract interest expenses when computing FCF)