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Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery costs $70,000.

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Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery costs $70,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $8.500. The depreclation 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 canital by $5,100 which will be recovered at the end of the machinery's life. The machinery has a three year itfe and will increase The Wall's revenues by $150,000 and costs by $25,000 for each year of the project's three year llfe. The Wall has a 10% cost of capital and has a 20% tax rate. What is the operating cash flow in year 2 for the project? Multiple Choice $106,300 $100,000 $104,620 $70,000 What is the initial cash outflow for this project? Multiple Choice $83.600 $70,000 $75,100 $5,100 What is the total cash flow in year 3 of the project? Multiple Choice $109,880 $102,100 $106.480 $114,980

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