You are tasked with evaluating the purchase of a super computer for the control room.

The base price is $400,000 and it would cost another $100,000 to modify the machine to install the machine. The equipment falls in the MACRS 3 year class of depreciation with rates of 33%, 45%, 15%, and 7%. The machine would require an investment in hardware (inventory/net operating working capital) of $50,000. The machine would produce revenue of $300,000 per year with costs of $20,604 per year. The firms tax rate is 20%.

The firm plans on selling the machine at the end of three years for $150,000 and recovering their investment in net working capital at that time as well.

What is the operating cash flow associated with the first year of operation?