QUESTION 12 A firm is considering a 3-year project with the following information In Year : 1. New equipment will be purchased for $400,000, 2. Inventories will rise by $60,000 and accounts payable will rise by $25,000. Years 1 through 3: 1. In Years 1 and 2, net working capital will not change. 2. In Year 3, net working capital will be fully recovered. 3. In Years 1 through 3, Operating Cash Flow will be $63,600 per year. 4. In Year 3, equipment will be sold for $40,000 (before-tax). Additional Info: 1. Equipment will be depreciated using MACRS rates of 33%, 45%, 15%, 7% in Years 1, 2, 3, 4. 2. Tax rate - 40% What is the project's cash flow in Year 0? -$535,000 -$435,000 -$735,000 $400,000 None of the other answer choices are correct QUESTION 15 A firm is considering a 3-year project with the following information. In Year 0: 1. New equipment will be purchased for $400,000. 2. Inventories will rise by $60,000 and accounts payable will rise by $25,000. Years 1 through 3: 1. In Years 1 and 2, net working capital will not change. 2. In Year 3, net working capital will be fully recovered. 3. In Years 1 through 3, Operating Cash Flow will be $63,600 per year. 4. In Year 3, equipment will be sold for $40,000 (before-tax). Additional Info: 1. Equipment will be depreciated using MACRS rates of 33%, 45%, 15%, 7% in Years 1, 2, 3, 4. 2. Tax rate = 40%. What is the project's cash flow in Year 3? O $533,800 O $333,800 None of the other answer choices are correct $433,800 O $133,800