Robert montoya , inc case. Production of wine in unused section of the main plant. New machinery estimated cost 2,200,000 would be purchased, but shipping cost would be 18,000, an installation charges would add another 120,000 to the total equipment cost. Robert inventories (new product requires aging for 5 years ) would have to be increased by 100,000.this cash is assumed to occur at time of the initial investment . the machine has a remaining life of 4 years, and the company has a special tax allowing to depreciate at MARCrS 3 year class life. Under tax law depreciation allowances are 0.33, 0.45,0.15, and 0.07 in year 1 through 4. the machine has a salvage value of 150,000 after 4 years. Montoya management expect to sell 100,000 bottles each of the next 4 years at a wholesale price 40$ per bottle but $32 would be needed to cover cash operating costs. Robert federal- state tax rat is 40% and its overall cost of capital is 10%. Construct cash flow statement computing the incremental cash flows MOntoya should consider valuing this project.