The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computers price is $30,000, and it falls in the MACRS 3-year class. The applicable depreciation rates are 33 percent, 45 percent, 15 percent, and 7 percent. Purchase of the computer would require an increase in net operating working capital of $4,000. The computer would increase the firms before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for three years and then sold for $25,000. The firms marginal tax rate is 40 percent, and the projects cost of capital is 14 percent.

Use the following MACRS schedule:

Year1234MARCS Factor33%45%15%7%

What is the operating cash flow in Year 2?

Group of answer choices

$11,687

$16,200

$14,400

$20,200

-$1,853

What is the total value of the terminal year non-operating cash flows at the end of Year 3?

Group of answer choices

$13,520

$19,840

$11,400

$18,120

$20,500