Suppose you are considering the purchase of new equipment in order to meet increased demand for your product. The equipment costs $320,000 today and has a useful life of eight years. You will depreciate the equipment by $40,000 each year over eight years, starting at the end of the first year. You expect that the equipment can be sold for $60,000 at the end of year eight. With the new equipment you expect an increase of revenues by $120,000 and of costs of goods sold (COGS) by $40,000 for each year over the next eight years. The net working capital requirements for this project will be 5% of the incremental revenues of this project. The marginal tax rate is 21%, and that the applicable interest rate is 10%.

1. A)Calculate the liquidation value of the equipment after tax in year eight.
2. B)Calculate the net working capital requirements for the project as well as the annual change in net working capital.
3. C)What is the NPV of this project for each year ?