. Beckett, Inc. is evaluating a capital expenditure proposal that requires an initial investment of $1,200,000 and has predicted pre-tax cash inflows of $200,000 per year for 10 years. The new equipment will have no salvage value, but will replace an old piece of equipment valued on the books at $150,000 that can sell for $120,000. Beckett pays a tax rate of 20%, and has a required rate of return of 12% (PV of single value factor for 10 years = 0.3220; PV of annuity factor for 10 years = 5.6502).

_________________________________ a. What is the net initial investment required for the project?

_________________________________ b. How much are the annual cash flows (undiscounted) associated with the project?

_________________________________ c. What is the net present value of the project? Show all work to get full credit.