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Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $125,000, plus installation fees of $15,000 and will generate earning before

Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $125,000, plus installation fees of $15,000 and will generate earning before interest and taxes of $50,000 per year over its 7-year life. The machine will be depreciated on a straight-line basis over its 7-year life to an estimated salvage value of 0. Mystics marginal tax rate is 40%. Mystic will require $40,000 in NWC if the machine is purchased. What is the terminal cash flow

$40,000
$20,000
$60,000
$50,000

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