Tinney & Smyth Inc. is considering the purchase of a new batch polymer-bonding machine for producing Crazy Rubber, a new children's toy. The machine will increase EBITDA by $194,385 per year for the next two years. The machine's purchase price is $260,000 and the salvage value at the end of two years is $46,800. The machine is in Class 43 with a depreciation rate of 30%. The depreciation expense in Year 1 is $39,000. The tax rate is 35%. What are the operating cash flows for the project in Year 1? (Include the depreciation tax shield.) $150,000 $145,000 $135,000 $140,000