1. (50 points) A firm is considering a new project. The firm has already paid a $10,000 consulting fee for the feasibility analysis of the project. The project costs $230,000 to purchase buildings and equipment, $10,000 for shipping fee, and $10,000 for installation fee. The life of the project is 6 years. The anticipated sales revenue is $100,000 in the first year and will increase by 10% per year through year 6. The anticipated cost is $40,000 in the first year and will increase by 4% per year through year 6. The working capital needed in this project is 20% of annual sales. The project falls in the 5-year ACRS class so it will have depreciation percentages of 20%, 32%, 19.2%, 11.52%, 11.52%, and 5.76%. The salvage value of the machinery is $25,000 at the end of Year 6. The company is in the 35% tax bracket and has 8% of the cost of capital. 1. Compute the depreciation basis of the project and the depreciation expenses in 6 years (5 points)2. Compute the annual cash flows in 6 years and draw a time line. (10 points)3. Compute the payback period of the investment (5 points).4. Compute the discounted payback of the investment (5 points).5. Compute the NPV of the investment. (5 points)6. Compute the IRR of the investment, and discuss the potential problems associated with IRR method in general. (10 points)7. Compute the MIRR of the investment. (5 points).8. Should this investment be taken or not? Discuss the reasons. (5 points)