1) XYZ Company is considering a project that requires a new equipment. The new machine will cost the firm $220,000. In order to have the machine in working condition, XYZ will spend $7,000 in installation and $3,000 in shipping. Since it will produce more, a $10,000 investment in net working capital is required. The new machine will be depreciated over the simplified straight-line depreciation method. The life of the asset is 5 years. What is the depreciation expense of this project in Year 2? Round to the nearest penny. Do not include a dollar sign in your answer.

2) XYZ Company is considering whether a project requiring the purchase of new equipment is worth investing. The cost of a new machine is $340,000 including shipping and installation. The project will increase annual revenues by $400,000 and annual costs by $100,000. The machine will be depreciated via straight-line depreciation for three years to a salvage value of $40,000. If the firm does this project, $30,000 in net working capital will be required. What is the annual cash flow of this project in the second year if the tax rate is 40%? Round to the nearest penny. Do not include a dollar sign in your answer.

3)You are a project manager. You are estimating cash flows of a potential project that requires investment of $250,000 in a machine, including installation cost, and $40,000 in working capital which will be fully captures at the end of the project. The marchine has the estimated life of 5 years and will be depreciated vie simplified straight-line method. The project is expected to raise the firm's revenues by $330,000 and costs by $125,000 annually. Since the trend of the product moves rapidly, you expect to terminate this project in 3 years. In 3 years, the machine you purchase for the project can be sold for $50,000. The firm has the marginal tax rate of 34%. What is the terminal value of the project? Round to the nearest penny. Do not include a dollar sign in your answer.

4) You are evaluating a capital project with a Net Investment of $800,000, which includes an increase in net working capital of $8,000. The project has a life of 20 years with an expected salvage value of $100,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $120,000 per year and operating expenses by $14,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 12%. What is the net present value of this project? Round to the nearest penny. Do not include a dollar sign.