You have just landed a consulting position with Hawkesworth Inc. Your first task is to determine if an old bottling machine should be replaced with a new more efficient machine. The projects' data are shown below. The old machine would be depreciated using the straight-line method over its remaining 2-year life, would have a $20,000 salvage value, and has a current market value of $30,000. The new machine will cost $100,000 with added installation costs of $25,000, be depreciated using a 3 years MACRS schedule, 33%, 45%, 15%, and 7%, and have a salvage value of $30,000 after 4 years. An increase in net working capital of $5,000 would be required. Because of production efficiency, the new bottling machine will be able to produce 11,000 bottles per year compared to a production of only 9,000 bottles per year for the old machine. In addition, the new machine is more efficient with a 50% operating cost compared to 65% for the old machine. Unit price, price inflation and cost inflation will be no different between the two machines.

Price	$100,000
Freight	$0
Installation	$25,000
Change in NWC	$5,000
Sale of old machine	$30,000

Operating Flows and Inflation Rates:

	New:	Old:
Sales volume	11,000	9,000
Year 0 sales price	$10.00	$10.00
Op costs	50.0%	65.0%
Price inflation	4.0%	4.0%
Cost inflation	2.0%	2.0%

Salvage Value, Tax Rate, and Cost of Capital:

	New:	Old:
Salvage value	$30,000	$20,000
Tax rate	40%
Cost of capital	10%
Old Depreciation:	3 yr MACRS	Straight Line
Current Book Value		$30,000
Life	4 years	2 years remaining

Use the following MACRS schedule:

Years	1	2	3	4
MARCS Factor	33%	45%	15%	7%

What are the nonoperating cash flow in years 2 and 5 respectively?