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Terminal cash flow: Replacement decision Russell Industries is considering replacing a fully depreciated machine that has a remaining useful life of $10$ years with a newer, more sophisticated machine. The new machine will cost $$202,000$ and will require $$29,200$ in installation costs. It will be depreciated under MACRS using a $5-$year recovery period $($see the table $$ for the applicable depreciation percentages$).$ A $$22,000$ increase in net working capital will be required to support the new machine. The firm's managers plan to evaluate the potential replacement over a $4-$year period. They estimate that the old machine could be sold at the end of $4$ years to net $$16,400$ before taxes; the new machine at the end $4$ years will be worth $$76,000$ before taxes. Calculate the terminal cash flow at the end of year $4$ that is relevant to the proposed purchase of the new machine. The firm is subject to a $21\%$ tax rate.

The terminal cash flow for the replacement decision is shown below: $($Round to the nearest dollar.$)$

Proceeds from sale of new machine

Tax on sale of new machine

Total after$-$tax proceeds$-$new asset

Proceeds from sale of old machine

Tax on sale of old machine

Total after$-$tax proceeds$-$old asset

Change in net working capital

Terminal cash flow

$$

$

$$$

$

$

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