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A corporation is evaluating the relevant cash flows for a capitalbudgeting decision and mustestimate the terminal cash flow. Theproposed machine will be disposedof at the

A corporation is evaluating the
relevant cash flows for a capitalbudgeting decision and mustestimate the terminal cash flow. Theproposed machine will be disposedof at the end of its usable life of fiveyears at an estimated sale price of$24226. The machine has anoriginal purchase price of $15287,installation cost of $1864, and willbe depreciated under the five-yearMACRS. Net working capital isexpected to decline by $2544. Thefirm has a 40 percent tax rate onordinary income and long-termcapital gain. The terminal cash flowis:

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