Coache Corporation is considering a capital budgeting project that would require an investment of $320,000 in equipment with a 4 year useful life and zero salvage value. The annual incremental sales would be $680,000 and the annual incremental cash operating expenses would be $440,000. In addition, there would be a one-time renovation expense in year 3 of $39,000. The companys income tax rate is 30%. The company uses straight-line depreciation on all equipment.

The total cash flow net of income taxes in year 3 is:

Multiple Choice

• $164,700

• $201,000

• $109,350

• $148,350