Given below is the net income statement for the second year of a project:
Revenues .......... $ 80,000
Operating costs ....... 41,000
Total overheads ........ 4,000
Depreciation .......... 2,800
Interest expense ........ 3,200
Taxable income ....... 29,000
Tax @ 40% .......... 11,600
Net income (earnings) ....... 17,400

This net income statement is based on the straight line depreciation. The depreciation based on MACRS is $4,500. At the end of the second year, the firm’s net working capital decreases by $800 due to this project. Of the total overheads, the incremental due to the project is $1,700. What is the project’s annual net cash flow for the second year?