Prow NEN Hag Question Juri TO The president of a new company has asked you to evaluate the proposed acquisition of new machine The machine price is $150,000 and it will require $9.500 in modifications to meet the company's specic needs The machine falls into the MACRS 3-year class. Purchase of the machine would require an increase in net operating working capital of $6,000 The machine would increase the firm's before-tax revenues by 568,000 per year. Stop The machine is expected to be used for 3 years and then sold for $10,000. HideShow Time Test Instructions The firm's marginal tax rate is 40 percent Project's cost of capital is 8 percent. MACRS 3-year Class Percentages 1 33% 2 45% 3 15% 4 7% 8 CHAPTER ELEVEN THERE ARE FOUR QUESTIONS WHICH WILL REFER TO EXHIBIT 11-1 CREATE YOUR TIMELINE and PROJECT ALL operating and non-operating CASH FLOWS FOR YEAR TIME PERIOD ANSWER THE FOUR QUESTIONS BASED ON YOUR TIMELINE AND CASH FLOW PROJECTIONS What is the OPERATING cash flow in Year 3? 0 $46,740.00 @ $55,000.00 $35,650.00 $44 075 00 Prow NEN Hag Question Juri TO The president of a new company has asked you to evaluate the proposed acquisition of new machine The machine price is $150,000 and it will require $9.500 in modifications to meet the company's specic needs The machine falls into the MACRS 3-year class. Purchase of the machine would require an increase in net operating working capital of $6,000 The machine would increase the firm's before-tax revenues by 568,000 per year. Stop The machine is expected to be used for 3 years and then sold for $10,000. HideShow Time Test Instructions The firm's marginal tax rate is 40 percent Project's cost of capital is 8 percent. MACRS 3-year Class Percentages 1 33% 2 45% 3 15% 4 7% 8 CHAPTER ELEVEN THERE ARE FOUR QUESTIONS WHICH WILL REFER TO EXHIBIT 11-1 CREATE YOUR TIMELINE and PROJECT ALL operating and non-operating CASH FLOWS FOR YEAR TIME PERIOD ANSWER THE FOUR QUESTIONS BASED ON YOUR TIMELINE AND CASH FLOW PROJECTIONS What is the OPERATING cash flow in Year 3? 0 $46,740.00 @ $55,000.00 $35,650.00 $44 075 00