Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $6,300 and sell its old washer for $2,100. The new washer will last for 6 years and save $1,300 a year in expenses. The opportunity cost of capital is 12%, and the firms tax rate is 40%.

A. If the firm uses straight-line depreciation to an assumed salvage value of zero over a 6-year life, what is the annual operating cash flow of the project in years 1 to 6? The new washer will in fact have zero salvage value after 6 years, and the old washer is fully depreciated.

B. What is project NPV?

C. What is NPV if the firm uses MACRS depreciation with a 5-year tax life? Use the MACRS depreciation schedule