Terminal cash$$ flow:$$Various lives and sale prices$$Looner Industries is currently analyzing the purchase of a new machine that costs $$159,000$ and requires $$19,900$ in installation costs. Purchase of this machine is expected to result in an increase in net working capital of $$30,300$ to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a$$ five$-$year recovery period$($see the tablefor the applicable depreciation percentages$)$ and expects to sell the machine to net $$10,500$ before taxes at the end of its usable life. The firm is subject to a $21\%$ tax rate.

a$.$ Calculate the terminal cash flow for a usable life of $(1)$ three years, $(2)$ five years, and $(3)$ seven years. INCLUDE THE FOLLOWING INFORMATION FOR $3$ YEAR, $5$ YEAR, and $7$ YEAR $(1.$ Proceeds from sale of proposed asset $2.$ Tax on sale of proposed asset $3.$ Total after$-$tax proceeds$-$new $4.$ Change in net working capital $5.$ Terminal cash flow$)$

b$.$ Discuss the effect of usable life on terminal cash flows using your findings in part a$.$

c$.$ Assuming a five$-$year usable life, calculate the terminal cash flow if the machine were sold to net $(1)$ $$8,945$ or $(2)$ $$169,100($before taxes$)$ at the end of five years. INCLUDE THE FOLLOWING INFORMATION for $(1)$ and $(2).(1.$ Proceeds from sale of proposed asset $2.$ Tax on sale of proposed asset $3.$ Total after$-$tax proceeds$-$new $4.$ Change in net working capital $5.$ Terminal cash flow$)$

d$.$ Discuss the effect of sale price on terminal cash flow using your findings in part $c.$

Data table

a$.$ Calculate the terminal cash flow for a usable life of $(1)3$ years, $(2)5$ years, and $(3)$

ALL INFORMATION FOR MACRS IS INCLUDED IN IMAGE ATTACHED.

$($Click on the icon here $$ in order to copy the contents of the data table below into a spreadsheet.$)$

Rounded Depreciation Percentages by Recovery Year Using MACRS for

First Four Property Classes