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The president of Lowell Inc. has asked you to evaluate theproposed acquisition of a new computer. The computer's price is$60,000, and it falls into the MACRS 3-year class (33% in year 1,45% in year 2, 15% in year 3, and 7% in year 4). Purchase of thecomputer would require an increase in net operating working capitalof $2,000. The computer would increase the firm's before-taxrevenues by $20,000 per year but would also increase operatingcosts by $5,000 per year. The computer is expected to be used for 4years and then be sold for $25,000. The firm's marginal tax rate is40 percent, and the project's cost of capital is 14 percent. Whatis the total value of the terminal year non-operating cash flows(after-tax salvage value + working capital recovered) at the end ofYear 4?a.$17,000b.$18,680c.$21,000d.$25,000e.$27,000