After-tax cash flow for a replacement project

A project would replace a portion of a company's equipment with new machinery expected to last three years.

Current machinery

item			$ amount
Book value			120,000
Market value			195,000

New machinery

item			$ amount
Cost			332,000
ΔCurrent assets			190,000
ΔCurrent liabilities			80,000

Δ means the change in the dollar amount.

Tax rate = 40%
Time horizon of the project = 3 years

New machinery

	Existing Equipment	The project	Increment
Annual sales	523,000	708,000	708,000-523,000 = 185,000
Cash operating expenses	352,000	440,000	440,000-352,000 = 88,000
Annual depreciation	40,000	110,667	110,667-40,000 = 70,667
Accounting salvage value	0	0	0
Expected salvage value	90,000	113,000	113,000-90,000 = 23,000

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(Question)
Assuming that working capital will be recaptured at the end of the project, what is the final period after-tax cash flow for the project?

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Recaptured working capital at the end of the project = ΔCurrent assets - ΔCurrent liabilities
= 190,000 - 80,000 = 110,000

Because the project is a replacement project, the incremental cash flows must be calculated.

Total cash flow in the final period
= Project cash flows + Return of net working capital + After-tax sale of fixed capital used in the project
= (185,000-88,000-70,667)*(1-40%) + 70,667
+ 110,000
+ (23,000 - 0)*(1-40%)
= 210,266.8