New machine costs $77,000 and is expected to be able to be used to replace an outsourced job that would cost $20,000 for each of the next 10 years.You expect to sell the machine after 10 years of use for a salvage value of $5,000.The initial cost of the machine can be depreciated on a 7-year straight line basis. Maintenance and repair costs are expected to average $3,000 per year. Assume the marginal tax rate (MTR) = 25%.

How do you solve for the taxable income?