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Grease Gougers International is considering replacing their existing grease gouging equipment with new equipment that has a technology that will not only be less costly to operate but will gouge more grease. The original equipment was purchased 5 years ago at a cost of $240,000 and is being depreciated using 8-year straight-line depreciation to zero. The original equipment can be sold for $70,000 today. The new equipment cost is $500,000, qualifies for the 3-year MACRS depreciation class and has a 3-year useful life. The applicable MACRS rates are 33%, 45%, 15% and 7%, respectively. The new grease gouging equipment would increase revenues $40,000 annually and would decrease operating costs (other than depreciation) by $90,000 annually. At the end of the 3-year life of this replacement analysis, the old equipment has an estimated salvage value of zero and the new equipment's salvage value is expected to be $100,000. The company's tax rate is 40% and their WACC is 16%. Also, the company expects to have enough other taxable income to write off any losses that may occur as a result of the replacement project. What is the total year 3 cash flow (operating plus terminal cash flow) for the Grease Gouger's replacement project? Selected Answer: [None Given] a. $96,000 Answers: b. $161,600 c. $170,000 d. $128,000 e. $141,700