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5. Incremental costs - Initial and terminal cash flow Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment in new equipment of $3,400,000, with an and installation costs. Alexander estimates that its accounts receivable and inventories need to increase by $680,000 to support the new project, some of which is financed by a $272,000 increase in spontaneous liabilities (accounts payable and accruals). The total cost of Alexander's new equipment is and consists of the price of the new equipment plus the In contrast, Alexander's initial investment outlay is depreciated by the end of its useful life. If the firm's tax rate is 40%, what is the project's total termination cash flow? $240,000 $568,000$648,000 $400,000 $680,000 $3,570,000 $3,978,000 project's additional accounts receivable investment project's accounts payable asset's installation and shipping costs $3,978,000 $3,808,000 $3,570,000