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What is the terminal cash flow

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Question - The terminal cash flow must be estimated when Nettext Corporation evaluates the relevant cash flows for a capital budgeting decision. At the end of its five-year useable life, the suggested machine will be sold for $2,000 on the open market. The machine costs $80,000 new, with a $20,000 installation fee, and will be depreciated over five years under the MACRS. The company's net working capital is anticipated to drop by $5,000. Ordinary income and long-term capital gains are taxed at 40% for the company. What is the terminal cash flow?

A. $8,200

B. $8,800

C. $6,200

D. $5,800

Reference no: EM133018975

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