A proposed power-saving equipment has a purchase price of $520,000 and installation cost of $60,000. 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:

Year	1	2	3	4	5	6
MACRS	20.00%	32.00%	19.20%	11.52%	11.52%	5.76%

The terminal cash flow for this project is.

1)	$29,078.40

2)	$60,000.00

3)	$72,785.54

4)	$119,078.40