Marston Manufacturing Company is considering a project that requires an investment in new equipment of $3,400,000, with an additional $170,000 in shipping and installation costs. Marston estimates that its accounts 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 spontaneous liabilities (accounts payable and accruals).

1. The total cost of Martson's new equipment is ___________

a. $3,780,000
b. $4,212,000
c. $720,000

and consists of the price of the new equipment plus the _______________________
a. asset's salvage value
b. assets installation
c. shipping
d. delivery costs.

2. In contrast, Marston's initial investment outlay is ________

a. $4,212, 000
b. $4,032,000
c. $3,924,000

3. Suppose Marston's new equipment is expected to sell for $600,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net working capital investment. The company chose to use straight-line depreciation, and the new equipment was fully depreciated by the end of its useful life. If the firm's tax rate is 40%, what is the project's total termination cash flow?

a. $672,000
b. $600,000
c. $360,000
d. $792,000