A proposed four-year project will require $360,000 for fixed assets, $50,000 for inventory, and $45,000 for accounts receivable. Accounts payable are expected to increase by $42,000. The fixed assets will be depreciated straight-line by $80,000 per year over the project life. At the end of the project, the fixed assets can be sold for $70,000. The net working capital returns to its original level at the end of the project. The after-tax operating cash flow per year is $82,500. The tax rate is 25 percent and the discount rate is 10 percent. What is the total cash flow in the final year of the project?

Select one:

a.

$165,500

b.

$188,000

c.

$158,000

d.

$198,000