(CHAPTER 6) A 2-year project is under consideration. Here's what's known about its cash flows: - $3,000,000 would need to be spent immediately to buy production equipment - The production equipment will be depreciating according to the 7-year MACRS class - At the end of the project, the production equipment is estimated to sell for a quarter of its original price - $300,000 would need to be spent immediately on net working capital investment - $1,000,000 would be generated each year in annual operating cash flows - The company faces a 40% corporate income tax rate - The rate of return for projects similar to this one is 10%. Use the values in the MACRS table below for any relevant calculations. Click to enlarge to full page, if needed. Based on the information above: (a) The sale of the production equipment at the end of the 2 nd year will generate an After-Tax Salvage Value in the amount of (b) When the project ends at the end of the 2nd year, the change in Net Working Capital for that final year will equal , and that will be for the company