13. A project requires an initial fixed asset investment of $600,000, which will be depreciated straight-line to zero over the six-year life of the project. The pre-tax salvage value of the fixed assets at the end of the project is estimated to be $50,000. The projected sales volume for each year of the project is shown below. The sale price is $50 per unit for the first three years and $45 per unit for years 4 through 6. A $30,000 initial investment in net working capital is required, with additional investments equal to 7.5% of annual sales for each year of the project. Variable costs are $35 per unit, and fixed costs are $50,000 per year. The firm has a tax rate of 34% and a required return on investment of 12%.

Year 1 sales: 10,000

year 2 sales: 12,500

year 3 sales: 15625

YEar 4 sales: 19,531

Year 5 sales: 24414

year 6: 30518

Pleas explain the WCP part ( the 7.5% of the annual sales part, most of answers i found on chegg they used as 75%, so im so confued.) Thank you so much!