Master Minds Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $1.2 million. The fixed asset will be depreciated using MACRS and it falls into the 3-year class. The project is estimated to generate $1,600,000 in annual sales, with costs of $400,000. The tax rate is 35% and the required rate of return for Master Minds is 15%. (MACRS table should be handed in the exam) a. 10. What is the depreciation tax shield for year 1? $139,986 b. $300,000 $399,960 d. $420,000 C. a. 11. What is the OCF for year 1? $876,654 b. $1,179,960 $1,200,000 d. $919,986 c. a. 12. What is the book value of the fixed assets at the end of the project (year3)? $300,000 b. $266,760 $88,920 d. $0 C. 13. If they sell the fixed assets for $200,000 at the end of year three, what will be the after-tax cash in-flow to Master Minds, Inc from the sale? a. $200,000 b. $161,122 c. $72,202 d. $130,000