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A firm is considering a new four year project. To start the project, the firm must...

A firm is considering a new four year project. To start the project, the firm must purchase new equipment today for $300,000. This equipment will be depreciated using a 7-year MACRS schedule. The project will generate annual sales of $260,000. Annual expenses for the project will be 40% of sales (excluding depreciation). The project will require an initial investment in Net Working Capital of $12,000 immediately (year 0). Going forward, the balance sheet level of NWC will be 10% of annual sales. The tax rate facing the firm is 30%. What is the projected project cash flow for year 1?

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