Computing terminal-year FCF: Five years ago, a pharmaceutical company bought a machine that produces pain-reliever medicine at a cost of $2 million. The machine has been depreciated over the past five years, and the current book value is $1,200,000. The company decides to sell the machine now at its market price of $1 million. The tax rate is 34 percent.

1.What is the relevant cash flow for the machine project?

2.What is the relevant cash flow if the market price of the machine is $600,000 instead?