Response to the following problem:
Calculate the change in operating cash flow for each year using the following information:
¦ The equipment costs $200,000 and is depreciated using MACRS over five years.
¦ The equipment will reduce operating expenses by $25,000 per year for five years.
¦ The tax rate is 30%.
¦ Working capital needs increase by $10,000 when the machine is placed in service and are reduced at the end of the life of the machine.
¦ There is no salvage value at the end of five years.