NARRBEGIN: DSSS Corporation DSSS Corporation

NARRBEGIN: DSSS Corporation
DSSS Corporation
DSSS Corporation is considering a new project to manufacture widgets.The cost of the manufacturing equipment is $125,000.The cost of shipping and installation is an additional $10,000.The asset will fall into the 3-year MACRS class.The year 1- 4 MACRS percentages are 33.33%,44.45%,14.81%,and 7.41%,respectively.Sales are expected to be $225,000 per year.Cost of goods sold will be 60% of sales.The project will require an increase in net working capital of $10,000.At the end of three years,DSSS plans on ending the project and selling the manufacturing equipment for $25,000.The marginal tax rate is 40% and DSSS Corporation's appropriate discount rate is 15%.
-Refer to DSSS Corporation.What is the total cash flow generated in year 3?

A) $83,799
B) $54,797
C) $29,001
D) $15,098