what are the annual free cash flows generated by the project (5 identical cash flows occuring at dates 1,2,3,4 and 5)?

What is the terminal cash flow of this project?

a.3000

b.523000

c.530000

d.533000

You consider investing in your own political consulting firm named "Double Talk". Before anything, you must run some preliminary financial analysis on this potential investment project. The basic features of this project are the following. The project duration is 5 years and involves some physical capital, including computers, printers, various office furniture, etc. This physical capital requires an initial investment of 50 000 . Besides, this physical capital has a lifespan of 5 years and it will be depreciated on a simple straight-line basis. The overall expected market value of this physical capital in 5 years from now is 5000 . According to a market study that was conducted previously and that was paid 7000 , the expected revenue (sales) induced by this investment project amounts to 100 000 per year. The associated annual operating costs are 70 000 per year. Both the sales and the costs will remain constant during the project. The net working capital need for this project is zero. Besides, there is no capital expenditure (capex) involved in this project. Your team will occupy currently unused offices. These offices were bought 2 years ago for 500 000 . Given the real estate market conjuncture, the value of these offices today is 520 000 . Furthermore, real estate experts believe that the expected value of these offices in 5 years is 550 000 . You will assume that the totality of the initial outlay is paid at the beginning of the project (date 0), that the free cash flows occur at the end of each year, and that the terminal cash flow occurs at the end of the project (date 5). Your firm will be subject to a tax rate of 40% (the marginal tax rate for operating income and the long-term capital gains tax rate are both 40%). The firm estimated cost of capital (COC) for this project is 10% (i.e. you will use 10% as the discount rate for studying this project)