1) XYZ Corporation is considering a major new product introduction. You have been given the revenue, cost and working capital estimates below and told that the project will require capital equipment with an installed cost of $11 million. In year 5, the plant will be dismantled and sold or $1.5 million. For tax purposes, ABC will depreciate the investment over 5 years on a straight- line basis to a zero salvage value. If ABC has a required return of 996 and a marginal tax rate of 21% a. What is the NPV? (10 pts b. Should the new product be introduced? (1 pt) c. Why or why not? (1 pt) $ Millions Year Revenue Cost 1 5 3 0.25 2 6 3 0.5 3 7 3.5 0.75 4 8 4 1.0 5 9 45 1.25 WC