You have been asked by the president of your company to evaluate the proposed acquisition of a new vending machine. The machine’s basic price is $100,000 and it will cost another $20,000 to modify it for special use by your firm. It will be sold after 3 years for $50,000. Use of the machine will require an increase in net working capital inventories of $5,000. The machine will have no effect on revenues, but is expected to save the firm $40,000 per year in before tax operating costs, mainly in labor. The firm’s marginal tax rate is 46% and the project’s cost of capital is 10%. a) What is the operating cash flow in Year 3? b) Should the company buy and install the vending machine?