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Explain the terminal year cash flows

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Reference no: EM133074200

Tinney & Smyth Inc. is considering the purchase of a new batch polymer-bonding machine for producing Crazy Rubber, a children's toy. The machine will increase EBITDA by $215,000 per year for the next two years. The machine's purchase price is $260,000 and the salvage value at the end of two years is $46,800. To run the Crazy Rubber production line the company will need to purchase an inventory of polydimethylsiloxane and boric acid for a total cost of $15,000. The tax rate is 35%. What are the terminal year cash flows? (Assume that depreciation is not tax deductible.) Round your answer to the nearest dollar.

Reference no: EM133074200

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