Vulcan Technologies Ltd is looking at undertaking a new IT project. The project is expected to have a three (3) year life. You have been tasked with examining the project for the board of Vulcan if the new project is acceptable. To assist you the following information about the project has been collected. IT project information: a. Initial investment (new equipment): $8,000,000 b. All initial investment costs are depreciated straight-line at a rate of 25% pa. c. Estimated revenue (per year): $8,000,000 d. Operating expenses (per year): $5,000,000 e. Company tax rate: 30% pa Additional information: At the end of the project Vulcan anticipates it will be able to sell the new equipment (initial investment) for $2,500,000. The new IT project is expected to cost the firm's existing projects $300,000 in lost revenue (before tax) each year $4,000,000 of the initial investment will be financed using debt with an interest rate of 10% pa compounded annually. The remaining money will be drawn from retained earnings Vulcan undertook extensive market research prior to considering undertaking this project. The market research cost $120,000 All cash flows are stated in nominal terms Phoenix believes a discount rate of 12% pa (nominal) is appropriate for this project.

what is the net cash flows of the IT project?