Bette Middler is planning on selling property to John Smith for $250,000 on a 3-year

installment basis. John will pay a 30 percent down payment and the balance will be

financed over a 5-year period at 8 percent interest with annual payments. Bette's

original purchase price was $160,000 with acquisition costs of $10,000. She has made

no capital improvements, and her accumulated depreciation is $37,000 on a straightline

basis. Bette also has selling expenses of $8,000 and is in the 28 percent tax

bracket.

Calculate Bette's Before Tax Cash Flow and After Tax Cash flow for each of these 3 years.