Your planned hotel is projected to have the following: 1) Annual sales of three million dollars; 2) Annual operating expense of one million dollars; 3) Annual depreciation expense of one million dollars; 4) Annual net working capital of 500 thousand dollars. If the tax rate is 40%, what is its annual net cash flow?
1. $1,100,000
2. $1,000,000
3. Cannot be determined
4. $1.200,000