Annual savings from Project X include a reduction in ten clerical employees with annual salaries of $15,000 each, $8,000 from reduced production delays, $12,000 from lost sales due to inventory stockouts, and $3,000 in reduced utility costs.

Project X costs $250,000 and will be depreciated over a five-year period using straight-line depreciation. Incremental expenses of the system include two new operators with annual salaries of $40,000 each and operating expenses of $12,000 per year. The firm tax rate is 34%.

a. Find Project X's initial cash outlay.

b. Find the project's operating cash flows over the five-year period.

c. If the project's required return is 12%, should it be implemented?