Drexel corporation currently has $200,000 of revenues, $150,000 of operating expenses and $25,000 of interest expense for its business. Drexel is contemplating buying a new machine for $100,000 with a 5 year life and no salvage value. With the new machine Drexel will have total revenues of $250,000, operating expenses (not including new depreciation expense) of $160,000 and interest expense of $30,000 in year 1. Calculate the free cash flow to all investors for year 1 assuming no change in working capital and straight line depreciation. Use a 25% tax rate.

Group of answer choices

$31,250

$87,500

$83,750

$35,000