In Problem 10.2, to finance the industrial robot, the company will borrow the entire amount from a local bank, and the loan will be paid off at the rate of $37,000 per year, plus 10% on the unpaid balance. Determine the net after tax cash flows over the project life.

Cash Flow Statement012Operating activities   Net income 10,40012,019Depreciation 6,6664,445Investment activities   Investment 20,000  Salvage  8,000Gains tax (40%)   Financial activities   Borrowed funds10,000  Principal repayment0  Net cash flow $10,000