The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $360,000. The machine is to be depreciated using the straight line method over 4 years. The new machine is expected to have zero value at the end of the four-year period for depreciation purposes; however, it could be sold for $50,000 after its useful life. The investment is expected to generate $225,000 in annual cash flows for a period of four years. The tax rate 40%. The old machine can be sold for $30,000 however it has a book value of $40,000.

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What are the expected cash flow of the investment?

1) the calculate of the initial cash outflow

2) The cash inflow for the 4 years

3) the cash flow of the terminal year.