Your company is contemplating the purchase of a large stamping machine. The machine will cost $180,000. Additional transportation and installation costs are $5,000 and $10,000 respectively. Its MV at the end of five years is estimated as $40,000. The IRS has assured you that this machine will fall under a 3-year MACRS class life category. The justifications for this machine include $40,000 savings per year in labor and $30,000 savings per year in reduced materials. The before-tax MARR is 20% per year, and the effective income tax rate is 40%. The taxable income for year three is: