Hello to all,

I am a bit confused and hoping for some help on this question. I have my final exam in a couple days and this was a review question provided by my lecturer. Unfortunately she is now extremely difficult to get a hold of.

Guyana Revenue Authority is evaluating a new scanning machine. The machine requires an initial investment of$150,000. The expected return rate is 15% and will generate the following after tax inflows for the next seven (5) years.

YEARS CASH INFLOWS

1$30,000

2$60,000

3 20,000

4 40,000

5 50,000

Annual maintenance cost and insurance cost will be 5 % and 10% of total cash inflows respectively in each of the five (5) years.

I would like to know if should take the 5% and the 10% of each cash inflow PER YEAR, subtract that from the figures given above to give a new CASH INFLOW, and actually write that figure down under CASH OUTFLOWS when I draw my table, or am i going wrong here?