2. Incremental costs - Initial and terminal cash flow Consider the case of Acme Manufacturing: Acme Manufacturing is considering a project that requires an investment in new equipment of $3,360,000. Under the new tax lawe the 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 spontaneous liabilities (accounts payable and accruals). The company's tax rate is 25%. The after-tax cost of Acme's new equipment is Acme's initial net investment outlay is Suppose Acme's new equipment is expected to sell for $200,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net operating working capital (NOWC) investment. Remember, that under the new tax law, this equipment was fully depreciated the =0. If the firm's tax rate is 25%, what is the project's total termination cash flow? $150,000$534,000$200,000$434,000 Continue without saving