Thornley Machines is considering a 3-year project with an initial cost of $618,000. The project will not directly produce any sales but will reduce operating costs by $265,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $60,000. The tax rate is 38 percent. 13. What is the total cash flow in year 3 a. $265,000 b. $244,940 c. $284,540 d.$279,780 e. $282.160 14. Should this project be implemented if Thornley's requires a 9 percent rate of return? Why? yes; The NPV is $28,680.23 b. no: The NPV is $2,646.00 Ci d. yes: The NPV is $32.593.78 yes; The NPV is $24,766.69 C yes; The NPV is $43,106.54 15. What happens to the NPV if an additional increase in net working capital of $20,000 is required at the start of the project? (Hint: you do not have to make additional calculations for this question; you can look at the choices and answer the question conceptually. But you may calculate also) The NPV is unchanged. b. The NPV reduces by $20,000 c. The NPV increases by $20,000 d. The NPV reduces by $4,556 The NPV increases by $4,556