You're asked to evaluate the proposed purchase of a new machine. The machine costs $40,000, and would require an increase in net operating working capital of $2,000 at the time of purchase. The machine would increase the firms revenues by $20,000 per year but would also increase operating costs by $5,000 per year. It is expected to be used for three years and then be sold for $21,000. the firms marginal tax rate is 40%. (the annual depreciation rates over the next four years are 33%, 45%, 15%, and 7%.

what is the operating cash flow in year 3?

what is the net salvage value in the terminal year 3?

what is the terminal years non-operating cash flows year 3?