ABC Corp is considering a project to create new widgets. The project will last for $7$ years They plan to sell $10,000$ widgets in year one and the number of widgets will increase by $3\%$ each year. They will sell the widgets for $$10$ each and the cost to produce the widgets will be $$4$ per unit. Fixed costs are expected to be $$40,000.$ The project will require an initial capital investment of $$100,000$ which will be depreciated using a $5$ year MACRS schedule$($See Table $6\mathrm{.}3$ in the book$).$ In year $7,$ the equipment can be salvaged for $$10,000.$ Net Working Capital will be $5\%$ of the next years projected sales. The tax rate is $21\%$ and the Discount rate is $12\%.$

What are the cash flows from the purchase or sale of the equipment in each year?

Group of answer choices: answer by selecting one of the options below

$01234567$

$$(105,000\mathrm{.}00)$ $ $19,850\mathrm{.}00$ $ $23,786\mathrm{.}71$ $ $22,557\mathrm{.}95$ $ $22,448\mathrm{.}18$ $ $23,996\mathrm{.}33$ $ $24,381\mathrm{.}35$ $ $38,863\mathrm{.}60$

$01234567$

$$(100,000\mathrm{.}00)$ $ $10,000\mathrm{.}00$

$01234567$

$$(100,000\mathrm{.}00)$

$01234567$

$$(100,000\mathrm{.}00)$ $ $7,900\mathrm{.}00$

ABC Corp is considering a project to create new widgets. The project will last for $7$ years They

plan to sell $10,000$ widgets in year one and the number of widgets will increase by $3\%$ each

year. They will sell the widgets for $$10$ each and the cost to produce the widgets will be $$4$

per unit. Fixed costs are expected to be $$40,000.$ The project will require an initial capital

investment of $$100,000$ which will be depreciated using a $5$ year MACRS schedule$($See Table

$6\mathrm{.}3$ in the book$).$ In year $7,$ the equipment can be salvaged for $$10,000.$ Net Working Capital

will be $5\%$ of the next years projected sales. The tax rate is $21\%$ and the Discount rate is $12\%.$

What are the cash flows from the purchase or sale of the equipment in each year?