Dr. Hunter Thompson is considering opening an MRI clinic in Aspen. The business will operate for three years. The MRI machine, a GE, costs $2.6M and will be delivered immediately. The machine can be sold for $500,000 at the end of the three years. Dr. Thompson estimates that he can perform 2,500 scans annually at $700 per scan for $1.75M of annual revenues. Dr. Thompson will lease office space in a local strip-mall and estimates that annual operating expenses will be $550,000 (including rent, salaries, and wages). Dr. Thompson plans to offer credit to his customers. He expects to have about 45 days of sales in accounts receivable, or about $300,000. He has arranged venture funding from Oscar Acosta who expects a return of 10% on his invested capital. The tax rate is 35%. Answer the following questions to determine if the project is worth undertaking. (Assume that depreciation is not tax deductible.) What are the initial cash flows? (Round to the nearest dollar.) $1 -2.600.000 X Check Answer What are the operating cash flows in Year 1? (Round to the nearest dollar.) $ Check Answer What are the terminal cash flows? (Round to the nearest dollar.) $ Check Answer What is the NPV of the project? (Round to the nearest dollar.) Check