Keith Urban Bookstores is considering a major expansion of its business. The details of the proposed expansion project are summarized below:

The company will have to purchase $$600,000$ in equipment at t $=0.$ This is the depreciable cost.

The project has an economic life of four years.

The cost can be depreciated on a MACRS $3-$year basis, which implies the following depreciation schedule:

MACRS

Depreciation

Year Rates

$10\mathrm{.}33$

$20\mathrm{.}45$

$30\mathrm{.}15$

$40\mathrm{.}07$

At t $=0,$ the project requires that inventories increase by $$40,000$ and accounts payable increase by $$5,000.$ The change in net operating working capital is expected to be fully recovered at t $=4.($Hint: NWC $=$ CA$-$CL$)$

The project$$s salvage value at the end of four years is expected to be $$0.$

The company forecasts that the project will generate $$700,000$ in sales the first two years $($t $=1$ and $2)$ and $$400,000$ in sales during the last two years $($t $=3$ and $4).$

Each year the project$$s operating costs excluding depreciation are expected to be $55\%$ of sales revenue.

The company$$s tax rate is $40\%.$

The project$$s cost of capital is $11\%$

Question $21$ pts

What is CFFA at year $4?$

Group of answer choices

$$159,000$

$$174,000$

$$159,800$

$$200,000$

Flag question: Question $3$

Question $31$ pts

What is CFFA at year $2?$

Group of answer choices

$$282,000$

$$290,000$

$$275,000$

$$297,000$

Flag question: Question $4$

Question $41$ pts

What is the Depreciation for year $3?$

Group of answer choices

$$90,000$

$$75,000$

$$125,000$

$$95,000$

Flag question: Question $5$

Question $51$ pts

What is the Depreciation Tax Shield benefit at year $2?$

Group of answer choices

$$66,000$

$$130,000$

$$108,000$

$$90,000$