You need to evaluate a new project that has a 3-year life. The project requires buying a piece of new equipment costing $500,000, which will be depreciated straight-line to zero over 5 years. At the end of the third year of operation, the equipment will be sold for $100,000. The new project will generate $1,000,000 in additional annual sales and will require $500,000 in additional annual cost for the next three years. The project also requires an immediate investment in net working capital of $100,000, which will be fully recovered at the end of three years. The average tax rate for the company is 30%.

What is the project cash flow (cash flow from assets) for year 2?

a) $400,000

b) $380,000

c) $480,000

d) $280,000

e) $300,000