3 years 33% 45 15 7 MACRS RATE Recovery year 1 2 3 4 5 6 7 8 9 10 11 5 years 20% 32 19 12 12 5 7 years 14% 25 18 12 9 9 9 4 10 years 10% 18 14 12 8 7 6 6 6 A machine currently in use was originally purchased 2 years ago for $40.000. The machine is being depreciated under MACRS using a 5-year recovery period. The current machine can be sold at $42.000. A new machine, using a 3-year MACRS recovery period. can be purchased at a price of $140.000 and requires $10.000 to install. If the new machine is acquired the firm expects a $35.000 increase in current assets and a $15.000 increase in current liabilities. Earnings before depreciation, interest, and taxes are expected to be $70,000 for each of the next 3 years with the old machine, and to be $120,000 in the first and $130.000 in the second and third year with the new machine. At the end of 3 years, the market price of the old machine will equal zero, but the new machine could be sold to net $35.000 before taxes. The firm is subject to a 40% tax rate. Calculate the incremental) operating cash inflows for yearl. $43.920 $45,040 $46.760 $43.080