1. Lee Inc. purchases a digital color printer for $300,000 to launch its 4-year publishing project. (11%) This printer will be fully depreciated by the straight-line method over its 5-year economic life, and will be sold for $40,000 at the termination of the 4-year project. The variable costs are $30 per copy, and there are no fixed production costs. An annual sales volume of 100,000 copies of the book is expected over the life of this project. The marginal tax rate is 35%, the inflation rate is 3%, and the real discount rate is 12%. This project requires an initial net working capital requirement of $45,000 of which 90% can be recovered at the termination of the project. Compute (i) the break-even annual operating cash flow, and then (ii) the minimum selling price of each book that results in a zero NPV, for the publishing project. Compute the selling price of each book that results in zero accounting profit. (a) (b)