2. Incremental costs - Initial and terminal cash flow Consider the case of Newicastle Coal company: Newcastle Coal Company is conaldering a project that requires an investment in new equipment of $3,200,000, with an additional 5160,000 in shipping and instaliation costs. Newcastie sstimates that its accounts recelvable and inventories need to increase by 5640,000 to support the new project, some of which is financed by a 5256,000 increase in spontaneous liabilities (accounts payable and accruals). The totol cost of Newcastle's new equipment is and consists of the price of the new equipment plus the In contrast, Newcastie's initiol net investment outlay is Suppose Newcastie's new equipment is expected to sell for $200,000 at the end of its four-year useful iife, and at the same time, the firm expects to recover all of its net operating working capital investment. The company chese to une straight-line depreciation, and the new equipment was fully degreciated by the end of its useful life. If the firm's tox rate is 40%, what is the project's total kermination cash flow? $200,000$120,000$504,000$464,000