Moore co. : After tax cash flow

Moore Co is considering acquiring a new machine for $105,000. The machine is estimated to have a 10-year life and scrap value of $5,000. Over its life the machine is expected to produce 2,000 units each year with a sales price per unit of $500 and combined material and labour costs of $450 per unit. Tax-allowable depreciation is available on a straight-line basis on cost over five years. Moore has a 40% tax rate and tax is paid in the year of returns. What is the after-tax cash flow for the tenth year of the project? A.$81,000 B.$68,400 C.$63,000 D.$60,000 The correct answer is C. WORKING $000 ------------$000 Cash inflow (sales)--------------------------- (2,000 × $500)-----1,000 Cash outflow (materials & labour)-------(2,000 × $450)------(900) Operating cash inflow------------------------------------------------100 Tax at 40%---------------------------------------------------------------(40) Cash inflow from operations after taxes---------------------------60 Scrap value of equipment---------------------------------------------5 Tax on balancing charge------------------(40% × $5,000)-------- (2) Cash inflow from sale of machine after taxes --------------------3 Total cash inflow after taxes------------------------------------------63 QUERY a) I don't understand how the solution assumes that we have to consider tax on balancing charge in year 10 whereas TAD is only available over five years. Should not it be in year 5? Also, should they not give us a hint to consider balancing charge in year 10? b) If an exactly similar question asked for before-tax cash flow, then would we consider tax on operating cash flow (I think, no.)? Would we consider TAD benefits? --- Thanks!