The Ally Gator Corporation of Meadville, PA, make of Ally's electronic components, is considering replacing one of its current hand-operated assembly machines with a new fully automated machine. Existing situation: Original depreciable value of old machine - $70,000 Expected life 10 years Age 5 years old Expected salvage value in five years - \$0 Current salvage value $22,000 Marginal tax rate 34 percent Proposed situation: Fully automated machine resulting in annual savings of $38,000 Cost of machine - $86,000 Installation fee - $8,000 Expected life - five years, depreciated down to \$0 Salvage value in 5 years $30,000 What are the relevant after-tax free cash flows? $26,756 $27,092 $29,032 $29,772