Use the following to answer the next three questions: The Wall, Co. is considering the purchase of some new machinery. The new machinery costs $90,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $8,000. The depreciation percentages each year are: Year 1 = 33%, Year 2 = 45%, Year 3 = 15%, Year 4 = 7%. The machinery will require The Wall to increase its working capital by $5,800 which will be recovered at the end of the machinery's life. The machinery has a three year life and will increase The Wall's revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate.

What is the initial cash outflow for this project?

$90,000

$95,800

$103,800

$5,800