A B C D E F G H K L M N O Easy Chair Corp. is considering replacing its existing equipment that is used to produce comfort recline chairs. This existing equipment was purchased 2 years ago at a base price of $100,000. Installation costs at the time for the old machine were $5,000. The existing equipment is considered a 5-year class for MACRS. The existing equipment can be sold today for $40,000 and for $0 in 3 years. The new machine has a purchase price of $200,000 and is also considered a 5-year class for MACRS. Installation costs for the new machine are $10,000. It is estimated that this machine can be sold in 3 years (end of project) for $70,000. This new machine is more efficient and will offers savings before taxes of $20,000 a year. This new machine will also require additional working capital today of $12,000. This investment will be recovered at the end of the project in year 3. Tax rate is 20% and cost of capital is 10%. What is the Free Cash Flow in Year 3? 10 11 12 13 14 + 15 16