(Appendix 8C)Leamon Corporation Is Considering a Capital Budgeting Project That

(Appendix 8C) Leamon Corporation is considering a capital budgeting project that would require an investment of $240, 000 in equipment with a 4 year useful life and zero salvage value.The annual incremental sales would be $630, 000 and the annual incremental cash operating expenses would be $480, 000.In addition, there would be a one-time renovation expense in year 3 of $40, 000.The company's income tax rate is 35%.The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 3 is:

A) $92, 500
B) $110, 000
C) $78, 500
D) $118, 500