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Business, 12.08.2019 20:20 BobreyesV20

You must evaluate a proposal to buy a new milling machine. the base price is $120,000, and shipping and installation costs would add another $15,000. the machine falls into the macrs 3-year class, and it would be sold after 3 years for $70,000. the applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in appendix 12a. the machine would require a s6,000 increase in net operating working capital (increased inventory less increased accounts payable). there would be no effect on revenues, but pretax labor costs would decline by $46,000 per year. the marginal tax rate is 35%, and the wacc is 12%. also, the firm spent $5,000 last year investigating the feasibility of using the machine. ) what is the milling machine's terminal (non-operating) cash flow at the end of year 3? a. $76,000 b. $54,440 c. $51,500 d. $54,808 cost 135000

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