You are evaluating the purchase of a disposal. The base price of the machine is $108,000, but it would cost another $12,500 to modify it to make it functional. Because it is a priority machinery, the tax depreciation schedule is as follows: year1 33%, year 2 45%, year3 15%, year 4 7%. After three years, the machine will sell for $65,000. The machine will require the investment in Net Working Capital (inventories and customers) to increase by $5,500. It is not expected to have an effect on revenue, but it will result in savings for the company of $44,000 annually in pre-tax operating costs, mainly labor. The marginal tax rate is 34%, the cost of capital is 12%:

a) calculate the initial flow, the operating flows and the Terminal flow. b) Determine if the project is viable by calculating NPV and