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Question: Canadian Wilderness Company (CWC) just bought a machine that is expected to generate $25,000 in operating income before depreciation expenses each year. The machine, which has a depreciable basis equal to $60,000 falls into the MACRS 3-year class. What will be CWC's (a) after-tax operating income and (b) operating cash flow fro both this year (Year 1) and and three years from now (Year 3)? Assume that all sales adn operating expenses, except depreciation, are cash. CWC's marginal tax rate is 40 percent.

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