eplaced , it can be sold for $ 300 at the end of 6th year . Gilbert is considering purchasing the Side Steamer 3000 , a higher - end steamer , which costs $ 15,000 and has an estimated useful life of 6 years . At the end of sixth year , it can be sold at $ 1,500 . This steamer falls into the MARCRS 5 - year class , so the applicable depreciation rates are 20.00 % , 32.00 % , 19.20 % , 11.52 % , 11.52 % , 5.76 % for year 1 through year 6 respectively . The new steamer is faster and allows for an output expansion , so sales would rise by $ 2,500 per year ; the new machine's much greater efficiency would reduce the before - tax operating expense by $ 1,000 per year . To support the greater sales , the new machine would require inventories increase by $ 3,200 , but account payable would simultaneously increase by $ 800 . Gilbert's marginal federal - plus - state tax rate is 30 % , and its WACC is 12 % . 25 - 2825. What is the initial incremental ( net ) cash flow at time 0 ( ACFO ) if the new machine is purchased and the old one is replaced ? a.-\$15,000; b.-\$17,400 - $ 14,725 d.-\$15,255 e . - $ 16,550 (Delta*C*F_{3}) if the new machine is purchased and the old one is 26. What is the incremental ( net ) cash flow at time 3 replaced ? a . b . . $ 3665.0 e . \$3089.0; \$2743.4\$3125.0; \$2559.2 Pa