29 32 National Steel Corporation is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.2 million. The fixed asset will be depreciated on a straight line basis over its 3 year life after which it will be worthless. The project is estimated to generate $1,120,000 in annual sales with annual cost of goods expenses of $480,000. The tax rate is 35% and the required return is 12%. Find the following for the project Questions 29 - 32)

1. What is National Steel Corporations Operating Cash Flow?
   • a.) $156,000
   • b.) $400,000
   • c.) $556,000
   • d.) $1,120,000

2. What is National Steel Corporations Incremental Cash Flow (CFFA) in year 1?
   • a.) $156,000
   • b.) $400,000
   • c.) $556,000
   • d.) ($1,120,000)

3. What is National Steel Corporations Incremental Cash Flow (CFFA) in year 0?
   • a.) $156,000
   • b.) $400,000
   • c.) $556,000
   • d.) ($1,120,000)

4. What is National Steel Corporations Net Present Value for the project?
   • a.) $156,000
   • b.) $135,418
   • c.) $644,135
   • d.) $218,135