8. You work for a company that is evaluating equipment that would increase operational efficiencies but would not increase revenue. The equipment costs $800,000 and should reduce annual operating costs by $280,000 over its life. Your firm will use straight-line depreciation over the 3-year life to a $0 book value. The equipment will require the firm to hold an extra $25,000 of inventory over the 3-year period. Assume the firm sells the equipment for $30,000 at the end of the 3-year period. The discount rate is 12 percent, and the tax rate is 21 percent. What will be the after-tax cash flow from the sale of the equipment at the end of the project?

$30,000

$0

-$30,000

$23,700 (correct)

Please show a detailed explanation the correct answer is provided. If you could please demonstrate it in excel with the functions