You have been asked by the president of Starbrite Manufacturing to evaluate the proposed

acquisition of a new industrial robot. The robot's basic price is $$110,000,$ and it would cost another

$$10,000$ to modify it for special use. Assume that it would be sold after $3$ years for $$45,000,$ and that

it would require an increase in net working capital $($spare parts inventory$)$ of $$2,000.$ The industrial

robot would have no effect on revenues, but it is expected to save the firm $$40,000$ per year in

before$-$tax operating costs, mainly labor.

In groups, prepare the following:

What is to total investment in the project $($i$.$e$.$ time $0$ cash flows$)$

If taxes are $$6,600$ in year $1,$$$2,820$ in year $2$ and $$5,574$ in year $3,$ what are the operating cash

flows for years $1,2,3?($Hint: make a table where each row is a cash flow and each column is a

year$).$

What are the additional $($nonoperating$)$ cash flows in year $3?$