Marc Corporation wants to purchase a new machine for $400,000. Management predicts that the machine will produce sales of $281,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $81,000 per year. The company uses MACRS for depreciation. The machine is considered to be a 3-year property and is not expected to have any significant residual value at the end of its useful life. Marc's combined income tax rate, t, is 30%. Management requires a minimum after-tax rate of return of 10% on all investments. A partial MACRS depreciation table is reproduced below. Year 3-year 5-year
property property
1 33.33 20.00
2 44.45 32.00
3 14.81 19.20
4 7.41 11.52
5 11.52
6 5.76
What is the after-tax cash inflow in Year 1 from the proposed investment (rounded to the nearest thousand)?
a) $72,000.
b) $124,000.
c) $180,000.
d) $250,000.
e) $47,000.