You have decided to get into the cotton candy business.

A new cotton candy machine will cost $3260 plus $400 shipping.

You will have to pay an electrician $60 to hook it up.

Initial inventory expenses will be $600.

You expect the machine to return revenues of $3000 each year. Operating expenses should be $750 annually.

You will have to purchase a new sugar basket (cost $100) every year after the first year.

You expect the to use the machine for three years then sale it for $1000.

The machine is depreciated over four years using the straight line depreciation method.

Your tax rate is 40% and the company's required return on investment is 10%

(5pts)

Compute the Initial Outlay.	$4,320 $1,048 $1,722 $2,178 $1,368 $1,572 $3,234 $1,769
Compute the Cashflows for year one.	$4,320 $1,048 $1,722 $2,178 $1,368 $1,572 $3,234 $1,769
Compute the non-operating cash flows	$4,320 $1,048 $1,722 $2,178 $1,368 $1,572 $3,234 $1,769
Compute the cash flows for year three (OPERATIONAL AND NON OPERATIONAL).	$4,320 $1,048 $1,722 $2,178 $1,368 $1,572 $3,234 $1,769
Compute the NPV. (You're gonna need year 2 for this)	$4,320 $1,048 $1,722 $2,178 $1,368 $1,572 $3,234 $1,769