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Required information Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery
Required information Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery costs $70,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $8,000. The depreclation percentages each year are Year 1=33%, Year 2=45%, Year 315%, Year 4=7%. The machinery will require The Wall to increase its working capltal by $4,100 which will be recovered at the end of the machinery's life. The machinery has a three year life and will increase The Walls revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate. What is the total cash flow in year 3 of the project? Muitiple Choice $113580 $1021000 $105,580 $109480
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