A project has the following cash flows. Knowing that the required rate of return is 15%, should you accept or reject the project? 1) Accept it because it has a positive NPV. 2) Reject it because it has a negative NPV. 3) Accept it because the IRR is higher than the required rate of return. 4) Reject it because the IRR is lower than the required rate of return. The terminal cash flow for this project is (Use the following information): A proposed power-saving equipment has a purchase price of $580,000. The equipment will be used in a four-year project but is classified as five-year MACRS property for tax purposes. The equipment is expected to save $280,000 before taxes per year in energy costs, and it will have a salvage value of $60,000 at the end of the project. To decide on the feasibility of the investment, the managers have ordered a series of tests to determine whether the proposed equipment will realize the required costs savings or not for a total cost of $18,000. The required rate of return on the equipment is 14% and it is expected to increase working capital by $45,000 at the beginning of the project. The tax rate is 35 percent and the MACRS depreciation schedule is as follows: 1) $29,078,40 2) $60,000.00 3) $72,785.54 4) $119,078.40