The Anderson Airlines Group is analyzing a project that has projected incremental sales of $1,600,000per year and incremental costs of $980,000 per year. The project requires an initial upfront investment in net working capital (NWC) of $25,000. No other investments in NWC are anticipated. Fixed assets of $2,000,000 are needed and belong in a 20% CCA class. Assume that the asset class will remain open. The project has a life of five(5)years.At the end of the five years ,the equipment has an estimated market value of $780,000. The company has a cost of capital of 12% and is in the 35% marginal tax bracket. Assume that NWC will be recovered at the end of the project and that the half-year rule is in effect.

a). what is the present value of the after tax operating cash flow ignoring the impact of depreciation?

i) 1,409,787

ii) 1,436,812

iii) 1,452,725

iiii) 1,470,773

b) pretend that your answer to the previous question is exactly 1,500,000.what would the NPV of the project be?

i) 239,275

ii) 249,024

iii) 272,049

iii)287,779

iiiii) 318,282