A construction company is considering acquiring a new earthmover. The purchase price is $110,000, and an additional $25,000 is required to modify the equipment for special use by the company. The equipment falls into the MACRS seven-year classification (the tax life), and it will be sold alter five years (the project life) for $50,000. The purchase of the earthmover will have no effect on revenues, but the machine is expected to save the firm $68,000 year in before-tax operating costs, mainly labor, e firm's marginal tax rate is 40%. Assume that the initial investment is to be financed by a bank loan at an interest rate of 10% payable annually. Determine after-tax cash flows by using the generalized cash approach and the worth of the investment for project if the firm's MARR is known to be 12%.