A company is considering a 3-year project that requires paying $5,000,000 for a cutting-edge production equipment. This equipment falls into the 3-year MACRS class and will have a market value of quarter its original purchase price after 3 years. The project requires an initial investment in net working capital of $350,000. The project is estimated to generate $1,200,000 in annual operating cash flows. The company faces a 40% tax rate. The required rate of return on projects like this one is 10 percent. Year Seven-Year 1 OOOO AWN Property Class Three-Year Five-Year 33.33% 20.00% 44.44 32.00 14.82 19.20 7.41 11.52 11.52 5.76 14.29% 24.49 17.49 12.49 8.93 8.93 8.93 4.45 Based on this information, answer the following questions. (Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your final answer to TWO decimal places: for example, 10,000.23.) (a) The After-Tax Salvage Value of the production equipment at the end of the 3rd year equals # #1 $2,460,000 #2 $1,944,600 #3 $1,648,400 #4 $1,194,600 |#5 $898,400 (b) The change in Net Working Capital at the end of the 3rd year equals # #1 $1,050,000 #2||$700,000 #3 $350,000 #4||$0 #5|-$350,000