Martin Company has an investment opportunity that would involve the following cash flows: (1) Amount (2) Tax effect After-tax cash flows (1) x (2) 10% Factor Present value | Year(s) Cost of new equipment.................... $400,000 Working capital required..... 80,000 Net annual cash receipts for 8 years..... 100,000 Equipment repairs in 4 years................. 40,000 Salvage value of equipment. 50,000 The following additional information is available: Equipment's estimated useful life: 8 years . For tax purposes, the equipment would be depreciated over 8 years using the straight-line method and assuming zero salvage value (for simplification purposes). After-tax cost of capital: 10% Income tax rate: 30% | Cost of new equipment Working capital needed Net annual cash receipts Equipment repairs Depreciation deductions Salvage value of equipment Release of working capital Net present value