ready bright is launching a new toothpaste that requires an investment of $425,000 in new equipment. The equipment will be depreciated straight line to zero over it's five year life. You are going to sell the equipment at the end of 5 years. You estimate it will have a pretax salvage value of $100,000. The new toothpaste line will generate profits of $175,000 before taxes per year. To run the equipment you need to invest in additional Net Working Capital of $30,000 at the beginning of the project. The Net Working Capital will revert back to normal at the end of the project. The tax rate is 11% and required return is 8%

1. What is the Net Salvage Cash Flow value?

2. What formula do you use to calculate part 1?

3. What is the annual operating cash flow?

4. What is the formula you used to calculate part 3?