A company is considering a3-yearproject that requires paying$5,000,000for a cutting-edge production equipment. This equipment falls into the3-yearMACRS class and will have a market value ofquarterits original purchase price after3years. The project requires an initial investment in net working capital of$350,000. The project is estimated to generate$1,200,000in annual operating cash flows. The company faces a40%tax rate. The required rate of return on projects like this one is10 percent.

Based on this information, answer the following questions.(Increase decimal places for anyintermediatecalculations, from the default 2 to 6 or higher. Only roundyour 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 the3rdyear equals #

#1

#2

#3

#4

#5

.

#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 the3rdyear equals #

#1

#2

#3

#4

#5

.

#1$1,050,000#2$700,000#3$350,000#4$0#5-$350,000