Company A may buy a testing equipment costing $$80,000.$ This equipment is expected to

reduce labor costs of the clinical staff by $$25,000$ annually. The equipment has a useful life of

five years and falls in the MACRS three$-$year property class for cost recovery $($depreciation$)$

purposes. Salvage value of $$3,000$ is expected at the end of the useful life. The corporate tax

rate for Company A $($combined federal and state$)$ is $28\%,$ and its required rate of return is

$15\%.($If profits after taxes on the project are negative in any year, the firm will offset the loss

against other firm income for that year.$)$

On the basis of this information, what is the ATCF at the end of year $1?$

$$25,465\mathrm{.}92$

$$25,000\mathrm{.}00$

$$24,534\mathrm{.}08$

None of them