Problem 5. TAMUK 12/05/2020. A special purpose machine tool set would cost $30,000. The entire capital expenditure ($30,000) is to be borrowed with the stipulation that is be repaid by two equal end-of-year payments at 12% compounded annually. [CEEN 3317 TAMUK] The tool is expected to provide annual savings (in material) of $45,000 for two years and is to be depreciated by the MACRS three-year recovery period. This special machine tool will require annual O&M costs in the amount of $12,000. The tool is sold at the end of two years for $9,000. Using a tax rate of 21% compute the net cash flows. TAMUK 12/05/2020. Ori2020 Income statement 2 3 1 Oright 2020 Revenues 2020 Expenses Debt interest guiniga opyright 2020 0 4 Depreciation LO Taxable income Income Taxes opyright 202 Net income the 202 Cash flow atatement 020 002 020 Operating activities Net income Depreciation Investiment acticvities Investment Salvage Gains Tax Working capital Financing activities Borrowed funds Principal repayment yright 202 02 020 202 Net cash flow020 2020