what is the terminal cash flow of this project? what is the initial outlay required by this project? what are the yearly operating cash flows generated by this project?

As a new person in the finance department of your corporation, SFWco, your CFO has asked you to do some preliminary analysis on a potential investment project. The project under consideration is the replacement of a machine currently used to generate synthetic molecules. This old machine was bought for $ 490 000 two years ago. It had a 7-year lifespan and it has been depreciated on a simple straight-line basis. If the old machine is replaced, the company will be able to sell it for $ 200 000 (today). If it is not replaced, the corporation expects to be able to sell it at the end of its lifespan for $ 20 000. The new machine has a 5-year lifespan and it will be depreciated on a simple straight-line basis. It will require an initial investment of $ 1 500 000 (this amount includes all installation costs). The CFO of SFWco estimates that it will be able to sell the new machine in 5 years for $ 300 000. The new machine will not affect the existing sales for the company, but it is expected to reduce operating costs before taxes and depreciation by $400 000 per year for 5 years. The level of Net Working Capital should be maintained at 10% of next year's total operating costs. These numbers have been obtained using a market analysis paid $ 75 000. Its marginal tax rate for operating income is 40% and its long- term capital gains tax rate is 20%. The CFO has asked you to answer the questions that appear below to assist him in the analysis of this potential investment. The initial outlay is assumed to be paid at the beginning of the project (date 0), the yearly operating cash flows will be generated at the end of each period and the terminal cash flow at date 5. The firm estimates that annual cost of capital for this project is worth 10%