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Use the following information for the next three questions: Pioneer Corporation is looking to invest into a new machine to expand its furniture business. The

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Use the following information for the next three questions: Pioneer Corporation is looking to invest into a new machine to expand its furniture business. The machine will last for six (6) years and be depreciated under a five(5)-year MACRS Schedule. The new machine will cost $100,000 (total installed cost). The furniture produced will add incrementally to EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) of $25,000 each year of operation. Pioneer Corporation finds itself in the 25% corporate income tax bracket. The new business will require an initial investment of Working Capital: Current Assets (accounts receivable and inventory) will increase by $25,000 and Current Liabilities (accougits payable and accruals) will increase by $15,000. At the end of the six (6) years, the terminal year, the machine can be sold for $10,000, and the Working Capital invested at the beginning, recovered. Depreciation under 5 year MACRS is as follows: Year 120% Year 232% Year 319% Year 412% Year 512% Year 65% What is the Terminal Cash Flow (CF in Year 6) NOT INCLUDING THE OPERATIONAL CASH FLOW FROM THISSYEAR

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