2. Incremental costs - Initial and termhanal cash flow Consider the case of Alexander Industries: Alexander industries is considering a project that requires an investment in new equipment of $3,360,000, Under the new tax law, the equiperent is eligible for 100% bonus depreciation at t=0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its accounts receivable and inventories need to increase by $640,000 to support the new project, some of which is financed by a $226, 000 increase in spontaneous Fiabilities (accounts payable and accruals). The company's tax rate is 25%. The after-tax cost of Aexander's new equipment is Alexander's initial net irvestment outlay is 5uppose Alexander's new equipment is expected to seli for $200,000 at the end of its four-year useful life. and at the rame time, the firm expects to recover all of is net operating working capital (Toweg) investment. Anemernber, that under the new tax law, this epuipment was fully depreciated at t. - 0. If the firmis tax rate is 25 wh, what is the project's total termination cach flow?. 3434,000$200,000$5150,0005534,000 eligible for 100% bonus depredation at t=0 so the equipment will be fully depreciated at the time of purchase. Aloxander entimatos tha receivable and inventories need to increase by $640,000 to support the new project, some of which is financed by a $256,000 increase in liabdities (accounts payable and accruals). The company's tax rate is 25\%. The after-tax cost of Alexander's new equipment is Alexander's initial net investment outlay is Suppose Alexander's new equipment is expected t 30 at the end of its four-year useful life, and at the same time, the firm recnver all of its net operating working capital (NUC Remember, that under the new tax law, this equipment was fully dep - 0. If the firm's tax rate is 25%, what is the profect's total termination cash flow? $434,000 $200,000 5150,000 5534,000 The after tax cost of Alexander's new equipment is Alexander's initial net investment outlay is Suppose Alexander's new equipment is exs r $200,000 at the end of its four-year useful lafe, and at the same time, the firm expects to recover all of its net operating working cap restment. Remember, that under the new tax law, this equipment was fully depreciated at t. = 0. If the firm's tax rate is 25%, what is t al termination cash flow? $434,0005200,000$150,000$534,000