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Elsinore Company is considering the purchase of a new brewing equipment. The new brewing equipment...

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Accounting

Elsinore Company is considering the purchase of a new brewing equipment. The new brewing equipment will be depreciated using the MACRS 3year class. The equipment has an estimated life of 4 years, it costs $100,000, and Elsinore plans to sell the brewing equipment at the end of the fourth year for $10,000. The new brewing equipment is expected to generate new sales of $40,000 per year and the firm will face additional costs of $3,000 per year as well. In addition, the company will need to increase accruals by $5,000 and accounts receivable will also increase by $5,000. The company's tax rate is 20 percent. (Numbers in parentheses are negative)
What would be the cash flow from assets (CFFA) at t=4?
\table[[MACRS Class,],[Year,3yr,5yr,7yr
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