You are graduating soon and would like to start your own business manufacturing wine coolers. You collect the following information on the initial costs:

Cost of Plant and Equipment $=$ $$500,000$ Licensing

and Legal Costs $=$ $$50,000$

You can already claim an investment tax credit of $10\%$ on plant and equipment, and the licensing and legal costs have already been incurred. You estimate that you can sell $1$ million bottles a year at $$1$ a bottle. You estimate your costs as follows:

Variable costs$/$bottle $=$ $ $50$ cents

Fixed costs $/$ year $=$ $$200,000$ Assume that you had borrowed $60\%$ of your initial investment in the previous question, using a five$$year term loan, with an interest rate of $7\mathrm{.}5\%.$ Estimate the cash flows to equity on this project.