1. Your company is considering replacing its printers. In fact, last year you did a market survey at a cost of $1,000 to explore this option. The old printers are fully depreciated and have no market value. You expect the new printers to have a useful life of five years and be worthless at the end of that time. The new printers cost $10,000 and would be fully-depreciated over three years on the following schedule: Year 1: 60%, Year 2: 30%, Year 3: 10%. Fully- utilized, the printers would increase the company's operating income by $2,000 a year. The ne printers old require a $500 investment in working capital. The company is in the 40% tax bracket.

   What are the cash flows associated with this project? (i.e. What are the appropriate cash flows for a capital budgeting analysis?)