Mills Mining is considering an expansion project. The proposed project has the following features: The project has an initial cost of $500,000. This is also the amount that can be depreciated using the following depreciation schedule: MACRS Depreciation Rates 0.33 2 0.45 3 0.15 Year 4 0.07 If the project is undertaken, at t=0 the company will need to increase net operating capital by $60,000. This net operating working capital will be recovered at the end of the project's life (t-4). if the project is undertaken, the company will realize an additional $600,000 in sales over each of the next four years (t-1.2, 3, and 4). The company's operating costs (not including depreciation) will equal $400,000 a year. The company's tax rate is 40 percent Att = 4, the project's economic life is complete, but it will have a salvage value (before- tax) of $50,000 The project's WACC is 10 percent. The company is very profitable, so any accounting losses on this project can be used to reduce the company's overall tax burden. How much is the total initial investment outlay (total cash flow at t-0)? a $60,000 b. $440,000 c. $500,000 d. S560,000 9 10. How much is the after-tax salvage value? a $20,000 b. $30,000 c. $50,000 d. $95.000 11. What is the project's net present value (NPV)? a. $11,122.87 b. $48,336.86 c. $54,676.59 d. $68,336.86 e. $80,035.52