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Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment in new equipment of $3,570,000. Under the new tax law, the equipment is eligible for 100% bonus depreciation at t = 0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its account receivable and inventories need to increase by $680,000 to support the new project, some of which is financed by a $272,000 increase in spontaneo liabilities (accounts payable and accruals). The company's tax rate is 25%. The after-tax cost of Alexander's new equipment is Alexander's initial net investment outlay is Suppose Alexander's new equipment is expected to sell for $400,000 at the end of its four-year useful life, and at the same time, the firm expects t recover all of its net operating working capital (NOWC) investment. Remember, that under the new tax law, this equipment was fully depreciated at = 0. If the firm's tax rate is 25%, what is the project's total termination cash flow? O $708,000 O $508,000 0 $300,000 0 $400,000 Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment in new equipment of $3,570,000. Under the new tax law, the equipment is eligible for 100% bonus depreciation at t = 0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its account receivable and inventories need to increase by $680,000 to support the new project, some of which is financed by a $272,000 increase in spontaneo liabilities (accounts payable and accruals). The company's tax rate is 25%. The after-tax cost of Alexander's new equipment is Alexander's initial net investment outlay is Suppose Alexander's new equipment is expected to sell for $400,000 at the end of its four-year useful life, and at the same time, the firm expects t recover all of its net operating working capital (NOWC) investment. Remember, that under the new tax law, this equipment was fully depreciated at = 0. If the firm's tax rate is 25%, what is the project's total termination cash flow? O $708,000 O $508,000 0 $300,000 0 $400,000

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