$1.$ The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $$40,000,$ and it falls into the MACRS $3-$year class. Purchase of the computer would require an increase in net operating working capital of $$7,000.$ The computer would increase the firm's before$-$tax revenues by $$30,000$ per year but would also increase operating costs by $$12,000$ per year. The computer is expected to be used for $3$ years and then be sold for $$25,000.$ The firm's marginal tax rate is $40$ percent, and the project's cost of capital is $14$ percent.

What is the net cash flow at t $=0?$ Cash outflow should be in negative number, e$.$g$.,-33,000,$ and do not include the $ sign.

$2.$ The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $$50,000,$ and it falls into the MACRS $3-$year class. Purchase of the computer would require an increase in net operating working capital of $$2,000.$ The computer would increase the firm's before$-$tax revenues by $$27,000$ per year but would also increase operating costs by $$14,000$ per year. The computer is expected to be used for $3$ years and then be sold for $$25,000.$ The firm's marginal tax rate is $40$ percent, and the project's cost of capital is $14$ percent.

What is the operating cash flow in Year $2?$ Round it to a whole dollar, and do not include the $ sign.

Year MACRS

Percent

$10\mathrm{.}33$

$20\mathrm{.}45$

$30\mathrm{.}15$

$40\mathrm{.}07$