Jones Crusher Company Is Evaluating the Proposed Acquisition of a New

Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost $190,000, and it will cost another $33,000 to modify it for special use by the firm. The machine falls into the MACRS 3-year class, and it will be sold after 3 years of use for $110,000. The machine will require an increase in net working capital of $9,000 and will have no effect on revenues, but is expected to save the firm $90,000 per year in before-tax operating costs, mainly labour. The company's marginal tax rate is 40%. What is the cash flow from the project for year 1? MACRS Depreciation Rates
$$\begin{array} { | c | c | r | } \hline \text { Year } & \text { 3-Year } & \text { 5-Year } \\\hline 1 & 33.33 \% & 20.00 \% \\\hline 2 & 44.45 \% & 32.00 \% \\\hline\end{array}$$

A) $90,000
B) $83,730
C) $79,331
D) $71,840
E) $9,404