Part II: Cash Flow Estimation Use this information to answer questions 18-25 a Bearkat Enterprises is considering a project where they will make high end designer face masks. They can buy the equipment they need to make the face masks for $250,000 plus another $10,000 for training and installation. They will have to increase inventory by $5,000 and accounts payable will increase $1200. They think they can sell 50,000 masks a year at a price of $8.50 each for 4 years. The estimate variable costs at 80% of revenue. They follow a four years MACRS schedule for depreciation with the following depreciation rates: Year 1:33% Year 2- 45% Year 3: 15% Year 4: 7% 2 They believe the equipment has a salvage value of $25,000. BearKat Enterprises has a tax rate of 24.6%. And a WACC of 8.3%. Once the project is done the additional inventory will not need to be purchased and the accounts payable balance will be paid. QUESTION 20 Use part III of the information to answer this. What are Bearkat Enterprises operating cash flows (or free cash flows) for year 1 of this project? O A. $56,070 B. $62,190 O C.$85,197 O D. $110,630 QUESTION 21 Use part Ill of the information to answer this. What are BearKat Enterprises terminal cash flows for this project? A. $64,200 B. $20,790 C. $22.650 D. $39,550