Smith Industries has a proposed four-year project with $240,000 equipment cost that falls under the 5-year category using straight-line depreciation (i.e. there will be book value at end of project in year 4). Account Receivables will increase by $18,000. Account Payables will increase by $9,000. Inventory will increase by $7,000. The estimated annual EBIT will be $85,000 per year for each of FOUR years. The equipment is expected to be sold for $22,000 in year 4. The firm's marginal tax rate is 30%. Smith Industries estimates that an 11 percent return is required for this project.

a. Find the initial outlay, CF0 = I0

b. Find the FCFt for years 1-4

c. Find the net proceeds (salvage value after tax) at t=4

d. Find the terminal cash flow, TCF4