1. Katy Music is considering a project with a life of 3 years that will require $289,400 for fixed assets,

$36,700 for inventory, and $27,800 for accounts receivable. Short-term debt is expected to increase by

$16,500 when the project is started. The fixed assets will be depreciated straight-line to a zero-book value over 5 years. At the end of the project, the fixed assets can be sold for 20 percent of their original cost and the net working capital will return to its original level. The project is expected to generate annual sales of $270,000 and costs of $198,000. The tax rate is 21 percent and the required rate of return is 20 percent. What is the amount of the cash flow in the projects final year? (9 marks)