Question $11$

Jones Crusher Company is evaluating the proposed acquisition of a new machine. The

machine will cost $$190,000,$ and it will cost another $$33,000$ to modify it for special

use by the firm. The machine falls into the MACRS $3-$year class, and it will be sold

after $3$ years of use for $$110,000.$ The machine will require an increase in net working

capital of $$9,000$ and will have no effect on revenues, but is expected to save the firm

$$90,000$ per year in before$-$tax operating costs, mainly labor. In the terminal year,

there is a decrease in net working capital of $$9,000.$ The company's marginal tax rate

is $40\%.$ What is the machine's ending book value in Year $3?$ Round to the whole

number.

MACRS Depreciation Rates

Question $12$

Based on the same data in Question $11,$ what are the terminal year operating cash

flows $($OCF$)?$ Round to a whole number.