Continue using the JMac LLP information from the previous question: JMacis evaluating the adoption of a new product line, the Nanogel racquets. The new equipment for this line costs $4.2 million and will be depreciated straight line to zero over six years. The machine will be worthless at the end of the sixth year. The fixed cost for this new line is $1.6 million per year. The company has spent $70,000 in marketing research, and determined that it can sell 50,000 Nanogel racquets per year for six years. With the introduction of Nanogel, the company will lose sales of 10,000 per year of its existing Microfil racquets. The Nanogel has estimated price of $180 and unit variable cost of $110, while the Microfil currently sells at a price of $130 and has unit variable cost of $90. The new line requires an increase in Net Working Capital of $300,000 at the beginning, which will be fully reversed at the end. Tax rate is 34%, and JMac requires a 20% return per year. This project's depreciation expense is and its third-year cash flow CF3 is. $600,000; $634,000 $700,000; $1,228,000 $600,000; $1,492,000 $700,000; $800,000