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Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost $ 1 9 0 , 0 0 0 ,

Jones Crusher Company is evaluating the proposed acquisition of a new machine. The
machine will cost $190,000, and it will cost another $33,000 to modify it for special use by
the firm. The machine falls into the MACRS 3-year class, and it will be sold after 3 years of
use for $110,000. The machine will require an increase in net working capital of $9,000 and
will have no effect on revenues, but is expected to save the firm $90,000 per year in before-
tax operating costs, mainly labor. In the terminal year, there is a decrease in net working
capital of $9,000. The company's marginal tax rate is 40%. What is the machine's ending
book value in Year 3? Round to the whole number.
MACRS Depreciation Rates
Then, what are the terminal year operating cash flows (OCF)? Round to a whole number.
and
Based on the same data in Question 11, what are the terminal year cash flows? Round to a whole number.
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