Terminal cash flowlong dashReplacement decisionRussell Industries is considering replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new machine will cost $208,000 and will require $30,300 in installation costs. It will be depreciated under MACRS using a 5-year recovery period . A $23,000 increase in net working capital will be required to support the new machine. The firm's managers plan to evaluate the potential replacement over a 4-year period. They estimate that the old machine could be sold at the end of 4 years to net $15,400 before taxes; the new machine at the end of 4 years will be worth $71,000 before taxes.

Calculate the terminal cash flow at the end of year 4 that is relevant to the proposed purchase of the new machine. (show proceeds from sale of new machine, tax on sale of new machine, total after-tax proceeds-new asset, proceeds from old machine, tax on sale of old machine, total after-tax proceeds-old asset, change in net working capital, and terminal cash flow)

The firm is subject to a 40% tax rate.