Type of Cash Flow	20x0	20x1	20x2	20x3	20x4	20x5	20x6	20x7	20x8
1.	Acquisition cost and depreciation tax shield
2.	Software development
3.	Computer experts salary and fringe benefits
4.	Maintenance technicians wages and fringe benefits
5.	Changeover of line
6.	Employee training
7.	Investment in working capital (spare parts)
8.	Salvage value of equipment
	Tax effect of gain on sale
9.	Savings on manufacturing costs
10.	Disposal of equipment:
	Sales proceeds
	Tax effect of gain or loss
	Total after-tax cash flow	$0	$0	$0	$0	$0	$0	$0	$0	$0

7 Scientific Frontiers Corporation manufactures scientific equipment for use in elementary schools. In December of 20x0 the company's e equipment, which would radically change its manufacturing process. The controller bas.colloctod thefeud pertiner 10 December of 20x0. The vears. The equipment is in the MACRS 5-vear property class. The company will use the MACRS accelerated depreciation schedule. would cost $1,400,000, to be ment's useful life points 2. The robotic equipment requires software, which will be developed over a two-year period in 20x1 and 20x2. Each software expenditure, which will amount to $27,000 per year, will be expensed during the year incurred. of the new robotic equipment. The computer expert's annual salary will be $54.000. Fringe benefts will cost $28.000 annually Malntenance technicians will be needed. The total cost of their wages and fringe benefits will be $165,000 per year. 5. The changeover of the manufacturing line will cost $98,000, to be expensed in 20x1. Several employees will necd retraining to operate the new robotic equipment. The training costs are projected as follows: eBook Print References 20x1 $37000 20x2 27000 20x3 18,000 An inventory of spare parts for the robotic equipment will be purchased immediately at a cost of $68,000. This investment in working capital will be maintained throughout the eight-year life of the equipment. At the end of 20x8, the parts will be sold for $68,000. rojected to be $70,000. It will be fully depreciated at that time. quipment's salvage value at the end of 20x8 9. Aside from the costs specifically mentioned above, management expects the robotic equipment to save $560,000 per year in manufacturing costs 10. Switching to the robotic equlpment will enable Sclentific Frontlers Corporatlon next two years. The following sales schedule sell some of its manufacturing machinery over the projected. A ition Accumulated af Equipment Sold 20x1 190,000 Depreciation Time of Sale $116,000 231,000 Sales Proceeds S 36.000 172,000 20x2 345,000 11. Scientific Frontiers Corporation's tax rate is 30 percent. 12. The company's after-tax hurdle rate is percent. Use Exhibit 16-9 for your reference. Required: Prepare a year-by-year columnar schedule Including all of the after-tax cash flows associated with the robotic-equlpment decision. Assume that each cash flow will occur year-end. (Negative amounts should be indicated by a minus sign.)