You have just landed a consulting position with Hawkesworth Inc. Your first task is to determine if an old bottling machine should be replaced with a new more efficient machine. The projects data are shown below. The old machine would be depreciated using the straight-line method over its remaining 2-year life, would have a $10,000 salvage value, and has a current market value of $30,000. The new machine will cost $100,000 with added installation costs of $15,000, be depreciated using a 3 years MACRS schedule, 33%, 45%, 15%, and 7%, and have a salvage value of $20,000 after 4 years. An increase in net working capital of $5,000 would be required. Because of production efficiency, the new bottling machine will be able to produce 11,000 bottles per year compared to a production of only 8,000 bottles per year for the old machine. In addition, the new machine is more efficient with a 50% operating cost compared to 65% for the old machine. Unit price, price inflation and cost inflation will be no different between the two machines. Price $100,000 Freight $0 Installation $15,000 Change in NWC $5,000 Sale of old machine $30,000 Operating Flows and Inflation Rates: New: Old: Sales volume 11,000 8,000 Year 0 sales price $10.00 $10.00 Op costs 50.00% 65.00% Price inflation 4.00% 4.00% Cost inflation 2.00% 2.00% Salvage Value, Tax Rate, and Cost of Capital: New Old Salvage value $20,000 $10,000 Tax rate 40% Cost of capital 10% Old Depreciation: 3 yr MACRS Straight Line Current Book Value $30,000 Life 4 years 2 years remaining Year 1 2 3 4 MACRS Factor 33% 45% 15% 7% What is the projects net cash flow in year 3? Group of answer choices $50,000 $46,121 $26,064 $45,000 $35,145