The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0. The cane manufacturing machine will result in sales of 2000 canes in year 1. Sales are estimated to grow by 10% per year each year through year three. The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant. The canes have a manufacturing cost of $9 each. Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts. It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash, 4% of its annual sales in accounts receivable, 9% of its annual sales in inventory, and 5% of its annual sales in accounts payable. The firm is in the 21% tax bracket, and has a cost of capital of 10%. The required net working capital in the first year for the Sisyphean Corporation's project is closest to:

		$2880.
		$3960.
		$3600.
		$5400.

Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected the project will produce the following cash flows for the first two years (in millions).

Year

1

2

Revenues	1200	1400
Operating Expense	450	525
Depreciation	240	280
Increase in working capital	60	70
Capital expenditures	300	350
Marginal corporate tax rate	21%	21%

The depreciation tax shield for the Shepard Industries project in year one is closest to:

		$168 million.
		$96 million.
		$50 million.
		$59 million.