A $63,000 machine with a 5-year class life was purchased 2 years ago. The machine will now be sold for $50,000 and replaced with a new machine costing $88,000, with a 8-year class life. The new machine will not increase sales, but will decrease operating costs by $7,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the incremental annual cash flow associated with the project?

Which of the following is true concerning the 5/5 lapse rule? a) the 5/5 lapse rule deems that a taxable gift has been made where a power to withdraw in excess of $5,000 or five percent of the trust assets is lapsed by the powerholder. b) the 5/5 lapse rule only comes into play with a single beneficiary trust. c) amounts that lapse under the 5/5 lapse rule qualify for the annual exclusion. d) gifts over the 5/5 lapse rule do not have to be disclosed on a gift tax return.