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Bells & Whistles Corporation is interested in a 4-year expansion project that would increase the variety of its bells and whistles supplied to the market.

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Bells & Whistles Corporation is interested in a 4-year expansion project that would increase the variety of its bells and whistles supplied to the market. If the decision to accept the project is made, the company would need to immediately spend $2,000,000 to buy additional production equipment. This equipment will be losing the same amount of value over its 4 year economic life. The company's calculations show that the project should be able to bring $1,750,000 in sales revenues every year, with annual production costs of $650,000 The net working capital would also immediately need to be increased by $360,000. The purchased equipment should be able to sell for $345,000 when the project ends. The company faces the corporate income tax rate of 40%, and the appropriate discount rate is 11%. Answer the following two questions (YOU DO NOT need to use every single number given in this problem in order to answer the questions. Pay attention to the sign of your chosen cash flow. A negative sign (-) indicates cash outflow, while no sign indicates cash inflow for the company) (a) The project's estimated Year o total cash flow equals b) The project's estimated Year 1 total cash flow equals $ (a) The project's estimated Year 0 total cash flow equals (b) The project's estimated Year 1 total cash flow equals Year O cash flow -2,360,000 Year 0 cash flow = -2,000,000 Year 0 cash flow = -1,640,000 Year 0 cash flow = 2,000,000 Year O cash flow = 2,360,000 Year 1 cash flow = 334,500 Year 1 cash flow = 500,000 Year 1 cash flow = 694,500 Year 1 cash flow = 860,000 Year 1 cash flow = 946,000 4 Click Submit to complete this assessment. (a) The project's estimated Year 0 total cash flow equals $ (b) The project's estimated Year 1 total cash flow equals Year 0 cash flow = -2,360,000 Year 0 cash flow = - 2,000,000 Year 0 cash flow = -1,640,000 Year 0 cash flow = 2,000,000 Year O cash flow = 2,360,000 Year 1 cash flow = 334,500 Year 1 cash flow = 500,000 Year 1 cash flow = 694,500 A Click Submit to complete th Year 1 Year 1 cash flow = 860,000 Year 1 cash flow = 946,000

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