Your company has spent $250,000 on research to develop a new computer game. The firm is planning to spend $1,400,000 on a machine to produce the new game. Shipping and installation costsfor the new machine total $200,000 and these costs will be capitalized and depreciated together with the cost of the machine.The machine will be used for 3 years, has a $200,000 estimated resale value at the end of three years, and will be depreciated straight line over 4 years. Revenue from the new game is expected to be $1,200,000 per year, with costs of $500,000 per year. The firm has a tax rate of 35 percent, a cost of capital (discount rate) of6 percent, and it expects net working capital (NWC) to increase by $150,000 at the beginning of the project. This investment in NWC will be wholly recouped at the end of the project. Complete the table below.

Year	0	1	2	3
Revenue
Costs
Depreciation
EBIT
Taxes
Net Income
Operating Cash Flow
Change in Net OperatingWorking Capital
Change in Gross Fixed Assets
Total Free Cash Flow