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The Clouse Company is evaluating the proposed acquisition of a new milling machine. The machine's price...

The Clouse Company is evaluating the proposed acquisition of a new milling machine. The machine's price is $180,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $50,000. The machine would require an increase in net working capital of $7,000. The milling machine would have no effect on revenues, but it is expected to save the firm $50,000 per year in before-tax operating costs, mainly labor. Clouse's marginal tax rate is 30%

Complete the Table, Show how you calculated your numbers

Year
Cash Flow 0 1 2 3
Initial Cost
Change NWC
Operating Cash Flows
After Tax Salvage Value
Cash Flow Per Year
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Annual Cash flow is calculated in excel and screen shot provided below:

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