New Machine (Part 4)

You must evaluate a proposal to buy a new milling machine. The base price is $135,000, and shipping and installation costs would add another $ 8,000 The machine falls into the MACRS 3 - year class , and it would be sold after 3 years for $ 94,500 . The applicable depreciation rates are 33 % , 45 % , 15 % , and 7 % . The machine would require a $ 5,000 increase in net operating working capital payable). There would be no effect on revenues, but pretax labor costs would decline by $52,000 per year. The marginal tax rate 35%, and the WACC is 8%. What is the Terminal cash flow at time t=3, given that the book valuein Year 4 is $10,010?