Calculate the ATCF for the following investment (no ROR or NPV calculation is needed).

Project requires capital cost of $1,000,000 at year 0. Investment will yield the annual income of $400,000 and operating cost of $100,000 for four years (from year 1 to year 4). The capital cost is depreciable over 4 years (from year 1 to year 4) based on MACRS 3-year life depreciation with the half year convention (table below). The salvage value will be $400,000 at the end of year 4 and working capital of $300,000 is required in this project.

Year	1	2	3	4
Depreciation rate	33%	45%	15%	7%

$500,000 loan (at time zero) will be taken to the investment at 6% interest rate in the project. Loan has to be repaid by constant annual paymentsfrom year 1 to year 4 (4 payments).

The income tax will be 40% income tax.