A project will require $511,800 for manufacturing equipment. The equipment will be depreciated straight-line to a zero book value over the six-year life of the project. At the end of the project, the equipment will be worth about 10 percent of what we paid for it. We will have to invest $47,000 in net working capital at the start. The net working capital will be recovered at the end of the project. The project is expected to generate annual sales of $965,000 and costs of $508,000. The tax rate is 21 percent and the required rate of return is 14.7 percent.

What is the project cash flow at current point in time?

-$965,000

-$508,000

-$558,800

-$518,800

-$47,000

What is the project cash flow in Year 6?

$454,283.60

$466,375.20

$432,586.40

$520,124.60

$345,860.20