Minolta Machine Shop purchased a computer-controlled vertical drill press for $100,000. The drill press is classified as a 7- year MACRS property. Minolta is planning to use the press for 5 years. Then Minolta will sell the press at the end of service life at $20,000. There is a working capital recovery of $22,000 at the end of 5 years, and no further working capital is required in the future. The net annual revenues are estimated to be $110,000. If the estimated net cash flow at the end of year 5 is $72,000, what are the estimated operating and maintenance expenses in year 5? Minolta's income tax rate is 34%.
a. $70,326
b. $66,845
c. $46,415
d. $62,478
