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 $$ve years and falls in the MACRS three$-$year property class for cost recovery $($depreciation$)$ purposes. Salvage value of $$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 pro$$ts after taxes on the project are negative in any year, the $$rm will offset the loss against other $$rm income for that year.$)$

Part A

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

Group of answer choices

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

None of them

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

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

Part B

What is the ATCF at the end of year $2?$

Group of answer choices

$$27,956\mathrm{.}80$

$$22,043\mathrm{.}20$

None of them

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

Part C

What is the ATCF at the end of year $3?$

Group of answer choices

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

$$28,682\mathrm{.}56$

None of them

$$21,317\mathrm{.}44$

Part D

What is the tax consequence when Company A disposes the equipment at the end of year $5?$

Group of answer choices

No answer text provided.

No tax consequence

A capital loss of $$3,000\mathrm{.}00$

A capital gain of $$3,000\mathrm{.}00$