What is the terminal year after-tax nonoperating cash flow

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XYZ Company is considering the purchase of a new machine for $360,000, and an additional $40,000 is needed to install it. The machine will be depreciated straight-line to zero over a five-year life. The machine will generate no additional revenues, but it will reduce cash operating expenses by $140,000 annually. The machine will be sold for $110,000 after five years. An inventory investment of $80,000 is required during the life of the investment. XYZ is in the 40% tax bracket.

What is the terminal year after-tax nonoperating cash flow at the end of year five?

Reference no: EM132820076

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