Terminal cash flow-Various lives and sale prices Looner Industries is currently analyzing the purchase of a new machine that costs $161,000 and requires $20,200 in installation costs Purchase of this machine is expected to result in an increase in net working capital of $30,200 to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a 5-year recovery period 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 40% tax rate. a. Calculate the tminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years b. Discuss the effect of usable life on terminal cash flows using your findings in part a. c. Assuming a 5-year usable life, calculate the terminal cash flow if the machine were sold to net (1) S9,060 or(2) $171,000 (before taxes) at the end of 5 years d. Discuss the effect of sale price on terminal cash flow using your findings in part c. Terminal cash flow-Various lives and sale prices Looner Industries is currently analyzing the purchase of a new machine that costs $161,000 and requires $20,200 in installation costs Purchase of this machine is expected to result in an increase in net working capital of $30,200 to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a 5-year recovery period 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 40% tax rate. a. Calculate the tminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years b. Discuss the effect of usable life on terminal cash flows using your findings in part a. c. Assuming a 5-year usable life, calculate the terminal cash flow if the machine were sold to net (1) S9,060 or(2) $171,000 (before taxes) at the end of 5 years d. Discuss the effect of sale price on terminal cash flow using your findings in part c