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Ralph's Bow Works (RBW) is planning to add a new line of bow ties that will require the acquisition of a new knitting and tying machine. The machine will cost $1.3 million. It is classified as a 7-year MACRS asset and will be depreciated as such. Interest costs associated with financing the equipment purchase are estimated to be $30,000 per year. The expected salvage value of the machine at the end of 11 years is $40,000. The decision to add the new line of bow ties will require additional net working capital of $45,000 immediately, $35,000 at the end of year 1, and $10,000 at the end of year 2. RBW expects to sell $290,000 worth of the bow ties during each of the 11 years of product life. RBW expects the sales of its other ties to decline by $17,000 (in year 1 ) as a resalt of adding this new line of ties. The lost sales level will remain constant at $17,000 over the 11-yearlife of the proposed project. The cost of producing and selling the thes is estimated to be $50,000 per year. RBW will realize savings of $6,000 each year because of lost sales on its other tie lines. The marginal tax rate is 40 percent. Use Table 9A3 to answer the questions below. Round your answers to the nearest doliar. Compute the net investment (year 0 ). 3) Compute the net cash flows for years 1 and 11 for this project. NCF 2:$ NCFi1:s

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