CT Computers Inc. is considering whether to begin offering customers the option to have their old personal computers recycled when they purchase new systems. The recycling system would require CT to invest $ 600,000 in the grinders and magnets used in the recycling process. The company estimates that for each system it recycles, it would generate $ 1.50 in incremental revenues from the sale of scrap metal and plastics. The machinery has a five- year useful life and will be depreciated using straight- line depreciation toward a zero salvage value. CT estimates that in the first year of the recycling investment, it could recycle 100,000 PCs and that this number will grow by 25% per year over the remaining four- year life of the recycling equipment. CT uses a 15% discount rate to analyze capital expenditures and pays taxes equal to 30%.

a. What are the project cash flows? You can assume that the recycled PCs cost CT nothing.