A new machine costing $2,250,000 is considered three-year property and is being depreciated using the four MACRS rates provided below. The machine will produce $2,025,000 in annual revenues and $1,012,500 in annual cash expenses. Assume a 30% tax rate. What is the operating cash flow in year 1?

MACRS Rate - Year 1: 33.33%

MACRS Rate - Year 2: 44.45%

MACRS Rate - Year 3: 14.81%

MACRS Rate - Year 4: 7.41%

Answers:

$933,728

$825,458

$758,768

$625,458

$562,482