1. Smart Cars, Inc. is considering launching a new product in the coming year. The new project requires $6,000,000 capital investments at time zero, which will be depreciated based on the 3-year MACRS. Upon the project termination in year 4, the company expects to sell the assets for $1,000,000 salvage value. The firm has a 40 percent tax rate. What is the after-tax salvage value of the asset at year 4?

2. Heaven Fabrics is considering opening a new facility to meet the demand for the next 5 years. It will require initial capital expenditures of $10 million at time zero to open the facility. The initial investment in NOWC will be $450,000. The company expects to recover its NWC investments at the end of the project. Operating cash flows of $1,200,000 per year is expected for each year of the 5-year project. After 5 years the facility will be sold, and the after-tax salvage value is expected to be $1.6 million. It also plans to repay a $3 million loan to its bank upon the termination of the project. The company has a 40% tax rate. What is the Total Cash flow for the last year of the project (Year 5)?