In year 1, Firm A paid $42,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $2,620 and $5,900 depreciation with respect to the asset. Firm As marginal tax rate in both years was 21 percent.

Required:

Compute Firm As net cash flow attributable to the asset purchase in each year.

Compute Firm As adjusted basis in the asset at the end of each year.