Q2. It is estimated that a project will produce operating cash flows of $60,000 a year for four years. During the life of the project, inventory will be lowered by $20,000 and accounts receivable will increase by $25,000. Accounts payable will decrease by $10,000. The project requires the purchase of equipment at an initial cost of $200,000. The equipment will be depreciated straight-line to a zero-book value over the life of the project. The equipment will be salvaged at the end of the project creating a $30,000 after- tax cash flow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 12%? Show detailed calculations (20 marks) Q3. Jeffery Inc. is considering an investment which will cost $259,000. The investment produces no cash flows for the first year. In the second year, the cash inflow is $58,000. This inflow will increase to $150,000 and then $200,000 for the following two years before ceasing permanently. The firm requires a 14 percent rate of return and has a required discounted payback period of three years. Accept or reject this project? Why? Show detailed calculations and reasoning. (20 marks)