Required information

Use the following to answer the next three questions:

The Kevin Durant Co$.$ is considering the purchase of some new machinery. The new machinery costs $$100,000.$ The

machinery will be depreciated on a straight$-$line basis for three years and it will be sold after three years for $$8,250.$ The

machinery will require company to increase working capital by $$5,100$ which will be recovered at the end of the

machinery's life. The machinery is not anticipated to increase revenues but it will save the company $$173,050$ in costs

each year of the project's three year life. The company has a $10\%$ cost of capital and has a $20\%$ tax rate.

What is the operating cash flow for this project in year $1?$

Multiple Choice

$$138,440$

$$145,107$

$$173,050$

$$61,277$