25. Dama, Inc., is considering purchasing a new machine costing $1,200,000 to replace its current machine, which has a book value of $350,000 and could be sold for $75,000. The new machine would last 10 years, and would have a salvage value of $200,000. Each year, the new machine would save $300,000 in operating expenses. Dama has a tax rate of 30%, and a required rate of return of 9%.

Calculate the net initial investment, the annual cash flows, and the terminal cash flows of the project.