\#1 SHARK REPELLENT PROJECT (3PTS) Suppose we think we can sell 50,000 cans of shark repellent per year at a price of $4 per can. It costs us about $2.50 per can to make, and a new product such as this one typically has only a three-year life. We require a 20% return on new products. - Fixed costs for the project, including rent on the production facility, will run $17,430 per year - We will need to invest a total of $90,000 in manufacturing equipment; assume this $90,000 will be 100% depreciated over the three-year life of the project. - Cost of removing equipment will roughly equal its actual value in three years, so it will be essentially worthless on a market value basis as well - Project will also require an initial $20,000 investment in net working capital, and the tax rate is 21% What is the NPV of this project? What is the IRR\% of this project? Step 1: Build the project Pro-Forma Income Statement. Then solve for OCF. Step 2: Determine the project cash flows. Step 3: Apply the Evaluation Criteria. Solve for NPV and IRR. Using your calculator CF worksheet, input the TOTAL PROJECT CASH FLOWS and find: - NPV= - IRR=