Caltex Australia Limited is considering expanding their market presence on the Gold Coast by constructing two new petrol stations. Caltex Australia Limited anticipates this expansion will provide a lucrative competitive edge against rival firms. The new petrol stations will collectively cost $3.8 million, plus $70,000 in total for installation costs. The two petrol stations are to be treated as one project, with the petrol stations expected to be fully depreciated over a useful life of 10 years.

The new petrol stations will require Caltex Australia Limited to increase their net working capital, at the start of the project, by $60,000. They will also need to increase their net working capital by an additional $4,000 per year over the project's 10-year life. The expansion project is expected to increase the firm's annual revenues from $3.5 million to $4.2 million per year. Annual operating costs are also expected to increase from $400,000 to $480,000 per year.

At the end of this 10-year project, Caltex Australia Limited anticipate they will be able to dispose of the two petrol stations for $750,000 in total. The firm's marginal tax rate is 40%.

a)Calculate the project's net investment as of today.

b)Calculate the project's annual after-tax net operating cash flows for years 1 through 10.

c)Calculate the project's after-tax termination cash flow in year 10.