Incremental costs - Initial and terminal cash flow Consider the case of Acme Manufacturing: Acme Manufacturing is considering a project that requires an investment in new equipment of $4,000,000, with an additional $200,000 in shipping and installation costs. Acme estimates that its accounts receivable and inventories need to increase by $800,000 to support the new project, some of which is financed by a $320,000 increase in spontaneous liabilities (accounts payable and accruals). The total cost of Acme's new equipment is _____________ and consists of the price of the new equipment plus the _________________. In contrast, Acme's initial net investment outlay is _______________. Suppose Acme's new equipment is expected to sell for $1,000,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net working capital investment. The company chose to use straight-line depreciation, and the new equipment was fully 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? $1,000,000 $880,000 $1,080,000 $600,000