The Fresno Finial Fabricating Works is considering automating its existing finial casting and assembly department. The plant manager, Mel Content, has accumulated the following information for you: The automation proposal would result in reduced labor costs of $150,000 per year. The cost of defects is expected to remain at $5,000 even if the new automation proposal is accepted. New equipment costing $500,000 would need to be purchased. For financial reporting purposes, the equipment will be depreciated on a straight-line basis over its useful four-year life. For tax purposes, however, the equipment falls into the three-year property class and will be depreciated using the MACRS depreciation percentages. The estimated final salvage value of the new equipment is $50,000. Annual maintenance costs will increase from $2,000 to $8,000 if the new equipment is purchased. The company is subject to a marginal tax rate of 40 percent. What are the relevant incremental cash inflows over the proposals useful life, and what is the incremental cash outflow at time 0?

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