U minal cash flow-Various lives and sale prices Looner Industries is currently analyzing the purchase of a new machine that costs $165,000 and requires $19,800 in installation costs. Purcha expected to result in an increase in networking capital of $30,400 to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a 5-year recovery per for the applicable depreciation percentages) and expects to sell the machine to not $9,700 before taxes at the end of its usable Ife. The firm is subject to a 40% tax rate. Calculate the terminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years. Discuss the effect of usable life on terminal cash flows using your findings in part a. Assuming a 5-year usable , calculate the terminal cash flow it the machine were sold to g o $9.240.00 $169.700 1. Discuss the effect of sale price on terminal cash flow using your findings in partc. Calculate the terminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years | Data Table The followig table can be used to solve for the terminal cash flow (Round to the nearest dolla (Click on the con here in order to copy the contents of the datatable below into a spreadsheet) Proceeds from sale of proposed asset 5L Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes - Tax on sale of proposed asset Percentage by recovery year Total after-tax proceeds new Recovery year 3 years 5 years 7 years 10 yea 20% 10% Change in networking capital 324 Terminal cash flow 18 12 12 ON ON 5% 45% 25% 15% 10% 3333333333 Tous Enter any number in the edit fields and then click Check Answer 100% 100% "These percentages have been rounded to the nearest Whole percent to s ay calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double declining balance (2005) depreciation using the half yes convention 6 ring