77. Bruno is acquiring a new machine with a life of 5 years for use on its production line. The following data relate to this purchase. Cost of new machine Annual cost savings in cash expenses Terminal value Maintenance required in the 4th year Book value of the old machine $100 000 45 000 8 000 5 000 20 000 The new machine would replace an old fully-depreciated machine. The old machine can be sold for $15 000 at the time the new equipment is acquired. The income tax rate is 30% and the discount rate is 12%. Bruno uses the straight-line method for depreciation on all machines (ignore the half-year convention). What is the present value of the terminal cash flows? a. $3175 b. $8000 *c. $4536 d. $1361