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You are evaluating a proposed acquisition of a new machine costing $ 5 0 , 0 0 0 . While the machine is expected to

You are evaluating a proposed acquisition of a new machine costing $50,000. While the machine is expected to last for 5 years, it falls into the MACRS 3-year class. Purchase of the machine would require an increase of net operating working capital of $2,000. The machine would increase the firm's revenue by $14,000 per year and its operating costs by $6,000 per year. The firm's marginal tax rate is 31 percent, and the project's cost of capital is 14 percent. What is the operating cash flow in Year 4? MACRS 3-year schedule is as follows: 33%,45%,15%, and 7% for years 1 to 4, respectively.
Question 11 options:
$5,925
$6,195
$6,395
$6,605
$6,795
$6,975

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