Question - Metro Industries is considering the purchase of new equipment costing $1,430,000 to replace existing equipment that will be sold for $162,000. The new equipment is expected to have a $238,000 salvage value at the end of its 4-year life. During the period of its use, the equipment will allow the company to produce and sell an additional 33,800 units annually at a sales price of $26 per unit. Those units will have a variable cost of $12 per unit. The company will also incur an additional $70,000 in annual fixed costs.
Identify the amount and timing of all cash flows related to the acquisition of the new equipment.