QUESTION 29 Expansion Project A Firm is considering the Introduction of a Product. The Firm's Marginal Tax Rate is 40% - The Expected Life of the Project is 3 Years. - The Project requires an initial Increase in Net Operating Working Capital of $1,500 The Project requires an Investment in Equipment. The Cost of the Equipment is $28.000 and there is an Additional Charge of $12,000 for Shipping and Installation. The Equipment Falls into the 3-Year MACRS Depreciation Class and the Expected Salvage Value at the End of the Project is $6,000. - The Firm has already spend $1,500 on a Marketing Analysis that shows an increase in Revenues from the Project of $8,000 in Year 1, $12,000 in Year 2 and $10,000 in Year 3. The Project will also lead to a reduction in operating costs of $2,000 in Year 1, $5,000 in Year 2 and $4,000 in Your 3. 3-Year MACRS Depreciation Rates: Year 1: 33%, Year 2:45%, Year 3: 15%, Year 4: 7% What is the Cash Flow at Year 37 $18,220 $17,840 $17.240 $17,420