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Use the following to answer the next three questions: The Kevin Durant Co . is considering the purchase of some new machinery. The new machinery

Use the following to answer the next three questions:
The Kevin Durant Co. is considering the purchase of some new machinery. The new machinery costs $60,000. The machinery will be depreciated on a straight-line basis for three years and it will be sold after three years for $8,800. The machinery will require company to increase working capital by $5,200 which will be recovered at the end of the machinery's life. The machinery is not anticipated to increase revenues but it will save the company $154,450 in costs each year of the project's three year life. The company has a 10% cost of capital and has a 20% tax rate.
What is the total cash flow of the project in its terminal year?
Multiple Choice
$127,560
$139,800
$134,600
$132,760

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