What are the initial cash flow

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Lion lighting, Inc. is considering a new light bulb manufacturing machine that would cost $100,000 to buy and an additional $5000 to install. Lion lighting would have to maintain a parts inventory as net working capital during the life of the machine that would be sold at the end of the machine's life. The machine would be depreciated to $15000 over its 3-year life and then sold for $45000. The machine is expected to save $35000, $45000 and $55000 in year 1,2and 3, respectively. If lion lighting has a 30% marginal tax rate, what are the initial cash flow and each year's cash flow from the project?

Reference no: EM13287042

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