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 $2,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $ 17,000 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 - 33000 , 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 $ 60,000, 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 $ 26,000 per year but would also increase operating costs by $ 16,000 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: 1; 2; 3; 4

MACRS Percent: 0.33; 0.45; 0.15; 0.07

3. 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 classPurchase of the computer would require an increase in net operating working capital of $ 3,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years and then be sold for $27,000 The firm's marginal tax rate is 40 percent , and the project's cost of capital is 14 percent .

What is the total value of the terminal year non-operating cash flows at the end of Year 3? Round it to a whole dollar, and do not include the $ sign.

Year: 1; 2; 3; 4

MACRS Percent: 0.33; 0.45; 0.15; 0.07