Answer:
$132,745.82
Explanation:
required investment = $290,000 + $49,000 + $5,900 + $59,000 = $403,900
depreciable amount = $49,000 + $5,900 = $54,900
Research and development costs are expensed, they cannot be capitalized. Increase in net working capital cannot be capitalized either.
MACRS depreciation expense for year 1 under 8 year class life = 14.29%
depreciation expense year 1 = $54,900 x 14.29% = $7,845.21
net cash flow year 1 = [($390,000 - $190,000 - $7,845.21) x (1 - 35%)] + $7,845.21 = ($192,154.79 x 0.65) + $7,845.21 = $124,900.61 + $7,845.21 = $132,745.82
