1, i)

MACRS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Depreciation Rate 20% 32% 19.2% 11.52% 11.52% 5.76% A company invests $26477 in new machinery, which was depreciated using the five-year MACRS schedule shown above. If the company sold the machinery immediately after the end of year 3 for $13427, what is the after-tax salvage value from the sale, given a tax rate of 26%? Enter your answer in dollars and round to the nearest dollar.

ii) You are considering adding a new division into your existing firm. This will entail an increase in inventory of $8882, an increase in accounts payables of $2292, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the new division is _______________. Enter your answer in dollars and round to the nearest dollar. (Also, show how to put it in TI-83 plus Calculator)

iii) Company XYZ, an all-equity firm, reported incremental revenues (net income) of $375 million for the most recent year. The firm had depreciation expenses of $146 million and capital expenditures of $171 million. The company also had an increase in net working capital of $20 million. What is the free cash flow? Enter your answer in dollars and round to the nearest dollar. (Also, show how to put it in TI-83 Calculator)