CTU Inc., a U.S. firm, is considering an investment project in England. The current exchange rate is $1.2=1. The firm assumes that the exchange rate will remain the same for the next 3 years. Based on the agreement with the U.K. government, the firm will be able to remit 100% of the cash flow generated from the project. The government will levy a 10% withholding tax on the remittance. The monetary amounts in the following tables are denominated in the pound. What is the operating cash flow (in the pound) for year 3?

Equipment economic life (year)	3
WACC for the project	0.12
Nominal growth rate	0.10
Foreign tax rate (T)	0.40
Initial investment in NWC	90
Cost of equipment	900
Cost of factory building	1,000
Salvage value, equipment	200
Salvage value, factory building	800
Revenue (year 1)	4,000
Fixed cost (year 1)	200
Variable cost (% of revenue)	0.40
Annual depreciation	300
Withholding tax on remitted funds	0.10

Select one:

a.

1,717

b.

1,428

c.

1,620

d.

1,520

Can you please provide the explanation, formula and correct answer for the problem above?

I need specific step by step on how to solve the problem. The answer is A) 1,717, can you please explain how/why?