Western Inc. purchases a machine for $12,000. Installation costs for this machine amounts to $3,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%;

year 2 = 32.00%;

year 3 = 19.20%;

year 4 = 11.52%.

Western has a tax rate of 33%. If the machine is sold at the end of the fourth year for $4,000, what is the cash flow from disposal?

$3299.47

$3364.29

$3122.58

$3535.36

$3315.71