A company is planning an investment of 5,000,000 today. The investment is depreciated on a straight-line basis over the life of 5 years and the residual value at the end of the project is assumed to be 500,000. The investment will generate the following income over the next five years: 4,000,000, 4,500,000, 5,000,000, 5,500,000 and 6,000,000. Payable operating expenses (operating expenses excluding depreciation) will amount to 60% of the income in the individual year. The annual working capital requirement is assumed to be 10% of the following year's turnover. The project will be part-financed with a serial loan (repaid with equal annual installments over the project's lifetime) of 5,000,000 at an interest rate of 2% pa. The project's tax rate is 20%.

1) What will be the result after tax (annual result) in year 2?

2) If we use the total capital method, what is the tax calculated in year 3?

3) If we use the equity method, what is tax calculated in year 3?

4) What will be the cash flow to the total capital (after tax) in year 3?

5) What will be the cash flow to equity (after tax) in year 3?

6) What will be the change in working capital requirements in year 1?

7)What will be the change in working capital requirements in year 4?