Russell Construction is trying to decide whether to purchase a large construction crane. The crane will cost $10,000,000, and will be depreciated to zero over the 4 year life of the project. The company has determined that the annual operating cash flow generated by the crane would be $3,970,000, and a competitor has told the company they will buy the crane at the end of Year 4 for $1,200,000. No additional working capital will be needed for the project. Assuming a tax rate of 21%, what is the Year 4 total cash flow of the project?

Multiple Choice

• $3,970,000

• $4,267,000

• $4,760,000

• $5,170,000

• $4,918,000