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Jake the Dog Inc. is investing in a new portable iguana killing machine that will cost $200,000. The machine has a useful life of 6

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Jake the Dog Inc. is investing in a new portable iguana killing machine that will cost $200,000. The machine has a useful life of 6 years and falls into the 5-year property class for the depreciation purposes. The IRS MACRS schedule for the six years is: (1) 20% (2) 3296, (3) 19.2% (4) 11.52%, (5) 11.52% (6) 5.76%. It will generate $50,000 per year of savings for Jake and can be sold for $50,000 at the end of the 6-year period. Jake's corporate tax rate is 34%. In addition, Jake has 2000 outstanding 9% annual coupon bonds with a $1000 par value, 20 years to maturity and a price of $1085. Jake also has 60,000 shares of common stock outstanding that is selling for $45 per share. This stock has a beta of 2.45 (its Jake! he is a risky dog-dude!), the expected market return is 12% and the risk-free rate is 5%. Finally, Jake has 36,000 shares preferred stock outstanding that pays a 5.5% dividend and sells for $40 per share. What are the operating cash flows for the machine for years 1 through 6? O $33,000 43.300, 33.330, 23.400. 23.400, 18.400 O $41.332, 55.776, 43.928, 40.964, 40.964. 36.560 O $46,600, 54,760, 46,056, 40,833, 40.833. 36,917 $43.300, 53.760, 43.050. 38.430. 38.430. 34.380 None of the above

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