Smith Industries has a proposed three-year project with $280,000 equipment cost and shipping cost of $20,000. The equipment falls under the 5-year category MACRS depreciation-- 20%, 32%, 19%, 12%, 11%, and 6% (i.e. there will be book value at end of project in year 3). Account Receivables will increase by $18,000. Account Payables will increase by $7,000. Inventory will increase by $9,000. The estimated annual EBITDA will be $80,000 per year for each of three years. The equipment is expected to be sold for $32,000 in year 3. The firm's marginal tax rate is 40%. Smith Industries estimates that an 11 percent return is required for this project.

a. Find the CAPEX at t=0

b. Find the annual depreciation for each year

c. Find the Free Cash Flow for year 2

d. Find book value at the end of year 3

e. Find net proceeds (after-tax salvage value) in year 3 from the sale of the equipment