Pet & Company is considering launching a six$-$year long project that involves manufacturing glow$-$in$-$the$-$dark

dog leashes. Pet & Company is a relatively large company with annual income that puts it in the $34$ percent

income tax rate bracket. If the glow$-$in$-$the$-$dark dog leashes sell as well as expected, the company will be

seeing $$390,000$ coming in each year in sales revenues. A total of $$272,000$ would be paid each year for

production costs that include supplies, electricity bills, hourly wages, and other expenses. To launch this

project, $$490,000$ would need to be spent right away to cover the cost of buying specialized

production equipment and tools, and those will be losing their economic value based on the MACRS system

for the five$-$year property class.

Economic value lost in each year is: $20\mathrm{.}00$ percent during the first year, $32\mathrm{.}00$ percent during the second

year, $19\mathrm{.}20$ percent during the third year, $11\mathrm{.}52$ percent in years $4-5,$ and $5\mathrm{.}76$ percent in year six.

During the third year of the six$-$year project, the operating cash flow is estimated at

Multiple Choice

$$72,107$

$$97,072$

$$139,973$

$$109,867$

$$105,647$