Part III: Cash Flow Estimation Use this information to answer questions 16 - 22. 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 $200,000 plus another $10,000 for training and installation. They will have to increase inventory by $15,000 and accounts payable will increase $2,000. They think they can sell 20.000 masks a year at a price of $7 each for 4 years. The estimate variable costs at 55% of revenue. They follow a four yeas 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 $5,000. BeacKat Enterprises has a tax rate of 22%. Once the project is done the additional inventory will not need to be purchased and the accounts payable balance will be paid. QUESTION 16 Use part III of the information to answer this. What are Bearkat Enterprises year 0 cash flows for this project? O A. -$225,000 OB.-$223,000 O C. -$210,000 OD. -$200,000 QUESTION 17 Use part Ill of the information to answer this. What are Bearkat Enterprises depreciation expenses in year 2 for this project? O A. $90,000 OB. $94,500 OC. $135,000 D. $155,000 QUESTION 18 Use part III of the information to answer this. What are BearKat Enterprises operating cash flows for year 3 of this project? O A. $56,070 B. $173,840 OC. $275,310 OD. $276,990 QUESTION 19 Use part III of the information to answer this. What are BearKat Enterprises terminal cash flows for this project? O A. -$64,200 B. $0 OC. $16,900 OD. $22,021