On January $1,2021$ Tractor Company will acquire a new asset that costs $$360,000$ and that is anticipated to have a salvage value of $$31,000$ at the end of four years. The new asset:

qualifies as three$-$year property under the Modified Accelerated Cost Recovery System $($MACRS$)$

will replace an old asset that currently has a tax basis of $$97,000$ and that can be sold on this date for $$77,000($net of selling costs$)$

will continue to generate the same operating revenues as the old asset $($$$120,000$ per year$).$ However, it is predicted that savings in cash operating costs will be experienced as follows: a total of $$140,000$ in each of the first three years, and $$97,000$ in the fourth year.

Tractor is subject to a combined income tax rate, t$,$ of $40\%$ and rounds all computations to the nearest dollar. Tractor's fiscal year coincides with the calendar year. Assume that any gain or loss affects the taxes paid at the end of the year in which the gain or loss occurs. The company uses the net present value $($NPV$)$ method to analyze projects using the factors and rates presented below $($based on a discount rate of $14\%)$:

Year PV of $$1$ at $14\%$ PV of $$1$ Annuity at $14\%$ MACRS

$20210\mathrm{.}8770\mathrm{.}87733\%$

$20220\mathrm{.}7691\mathrm{.}64745\%$

$20230\mathrm{.}6752\mathrm{.}32215\%$

$20240\mathrm{.}5922\mathrm{.}9147\%$

The relevant discounted operating cash flows $($cost savings$)$ that should be factored into Tractor Company's analysis are:

Multiple Choice

$$34,454.$

$$195,048.$

$$229,502.$

$$237,062.$

$$240,230.$