Ridgley Company is considering two independent projects. One project involves a new product line, and the other involves the acquisition of forklifts for the materials handling department. The projected annual operating revenues and expenses are as follows:

Project I (investment in a new product)

Revenues ..........$ 90,000

Cash expenses ..........(45,000)

Depreciation ..........(15,000)

Income before income taxes .....$ 30,000

Income taxes .........(12,000)

Net income ..........$ 18,000

Project II (acquisition of two forklifts)

Cash expenses .........$30,000

Depreciation ...........30,000

Required:

Compute the after-tax cash flows of each project. The tax rate is 40 percent.