A firm is considering a new project. The project will require $543,000 for new fixed assets, $218,000 for additional inventory, and $42,000 for additional accounts receivable. Short-term debt is expected to increase by $165,000. What is the project's cash flow at time zero? -$554,000 -$543,000 -$638,000 -$968,000 Which one of the following best describes the concept of erosion? Expenses that have already been incurred and cannot be recovered The alternative that is forfeited when a fixed asset is utilized by a project The differences in a firm's cash flows with and without a particular project The cash flows of a new project that come at the expense of a firm's existing cash flows Change in net working capital related to imple enting a new project What is the amount of initial investment for the following project? The project requires buying a piece of new equipment costing $300,000, which will be depreciated straight-line to zero over 3 years. At the end of the third year of operation, the equipment will be sold for $100,000. The new project will generate $500,000 in annual sales and incur $200,000 in annual cost excluding depreciation for each of the next three years. The project also requires an immediate investment in net working capital of $100,000, which will be fully recovered at the end of three years. The average tax rate for the company is 40%. $400,000 $380,000 0 0 0 0 $300,000 $500,000