MLK Co is a manufacturing company which is considering the purchase of a new equipment. The below given summarizes all the information related to the equipment:

-Equipments price: $180,000 -Shipping: $20,000

-Payment to find a good place to install the equipment: $30,000

-Useful Life : 4 years

-Depreciation Method: MACRS 3 year class

-Total Revenues/ year: $100,000 -Operating costs (Excluding Depreciation)/year: $25,000

-Salvage Value: $10,000 -Increase in Current Asset: $23,000 -Increase in Current liabilities (Except N/P): $8,000 -WACC: 9%

-Tax rate: 40% Note: The MACRS rates are 33%, 45%, 15%, and 7% respectively.

5. The depreciation expense for the 2nd year is: *

A. $103,500

B. $66,000

C. $80,000

D. $90,000

E. None of the above

6. The depreciation expense for the 3rd year is: *

A. $30,000

B. $34,500

C. $66,000

D. $14,000

E. None of the above

7. The depreciation expense for the 4th year is: *

A. $30,000

B. $7,000

C. $14,000

D. $16,100

E. None of the above

8. The after-tax Cash Flow for the 1st year is: *

A. $65,000

B. $71,400

C. $111,000

D. $75,360

E. None of the above