4 5 67 If NO, use 5-year straight-line depreciation with new equipment cost of $400,000 and expected salvage value in year 3 of $180,000 Smith Industries has a proposed three-year project with the above CAPEX. Account Receivables will increase by $18,000. Account Payables will increase by $9,000. Inventory will increase by $7,000. The estimated annual EBIT will be $125,000 per year for each of three years. The firm's marginal tax rate is 30%. Smith Industries estimates that an 11 percent return is required for this project. a. Find the annual depreciation. (Remember to fully depreciate in order to maximize FCF) b. Find FCE for years 1-3 c. Find the terminal cash flow in year 3