26. Palles Company is considering a new investment that would cost $700,000 for new assets that would have a salvage value of $100,000. The project would last for 6 years, and would bring in

$200,000 in additional income each year. To free up capacity for the new project, Palles would have to sell off assets with a book value of $100,000 and sales value of $250,000. Palles has a tax rate of 20%, and a required rate of return of 11%.

Calculate the net initial investment, the annual cash flows, and the terminal cash flows of the project.