MACRS RATE Recovery 10 3 years 5 years 7 years year years 133% 20% 14% 10% 245 32 25 18 315 19 18 14 47 12 12 12 51 12 9 19 61 15 9 8 71 19 7 8 16 9 16 10 16 11 14 A corporation is evaluating the relevant cash flows for a capital budgeting decision and must estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $2,000. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Accounts Receivable, inventory and accounts payable will decline respectively by $10,000, $15,000 and $20,000 at the end of the 5 year project. The firm has a 40 percent tax rate on ordinary income and long- term capital gain. The terminal cash flow is $7,800 $6,200 O $5,800 O $8,200