A corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an...

A corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Net working capital is expected to decline by $6,200. The firm has a 40 percent tax rate on ordinary income and long-term capital gain.


Calculate the terminal cash flow.

5 year MACRS depreciation percentages


Year        Percentage


1                  0.2
2                 0.32
3                 0.19
4                 0.12
5                 0.12
6                 0.05

Extracted text: Click to see additional instructions A corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Net working capital is expected to decline by $6,200. The firm has a 40 percent tax rate on ordinary income and long-term capital gain. Calculate the terminal cash flow. $ 5 year MACRS depreciation percentages Year Percentage 1 0.2 0.32 3 0.19 4 0.12 0.12 6 0.05