Question: Scholastic Co. is evaluating different equipment. Machine A has an initial cost of $150,000 and has a four-year life, and costs $85,000 per year to

Scholastic Co. is evaluating different equipment. Machine A has an initial cost of $150,000 and has a four-year life, and costs $85,000 per year to operate. The machine will be depreciated using straight-line and the relevant discount rate is 7%. The machine will have a salvage value of $0. The firm has a tax rate of 21%. Calculate the operating cash flow in year 1.

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