Cost Plus is considering a three$-$year project to improve its production efficiency. Buying a new piece of equipment would cost $$500,000.$ It is expected to result in $$70,000$ in savings, per year, before taxes. This piece of equipment has a $5-$year economic life and it would follow the straight line depreciation method. Its salvage value at the end of the project is estimated at $$150,000.$ The equipment also requires an immediate investment in spare parts inventory of $$20,000.$ The company will require additional $$500$ in inventory in each succeeding year of the project. The company's tax rate is $40$ percent. The appropriate discount rate is $9$ percent.

Calculate the annual Operating Cash Flow.

HINT: You WILL NOT need to use all numbers given in this problem to answer this question!

$$82,000$

$$68,000$

$$64,000$

$$62,000$

$$ $$52,000$