Highlight Company Is Considering the Purchase of the Following Computer

Highlight Company is considering the purchase of the following computer equipment, which is considered 5-year property for tax purposes: $\begin{array}{lr}\text { Acqui sition cost } & \$ 420,000 \\\text { Annual cash flow } & \$ 140,000 \\\text { Annual operating costs } & \$ 31,000 \\\text { Expected salvage value } & \$0 \\\text { Cost of capital } & 11 \% \\\text { Tax rate } & 35 \%\end{array}$ Highlight Company plans to use Modified accelerated cost recovery system (MACRS) and keep the computer equipment for seven years.What would the MACRS deduction in Year 1 be? (Round your answer to the nearest dollar.)

A) $72,000
B) $84,000
C) $60,000
D) $68,000