Initial Capital Investment (P&E)

$5.4 million

Initial Investment in Inventory

$350,000

Annual Sales in Year 1

$2.1 million

Annual Operating Expenses in Year 1

$945,000

Depreciation

3-year MACRS

Anticipated Salvage Value of P&E in 5 years

8%

Tax Rate

34%

Company Beta

1.2

Return on the S&P

7%

Return on T-bills

3%

YTM on Existing Debt

7.25%

Debt to Equity Ratio

.6

Anticipated Dividend

$12

Current Stock Price

Growth Rate of Dividends

5%

Floatation Cost of New Equity

4%

Cost of Marketing Study

$55,000

Cost to Ship and Install (P&E)

$100,000

Opportunity Cost

$95,000

The company's sales forecast anticipates a 5% growth in sales over the next five years with a continued 45% profit margin each year. Using the Data above, answer questions 1-17. Round all Income Statements to the nearest whole dollar. Round all percentage calculations 3 decimal places.

Terminal cash flow is?