2. Mainely Snowboarding wants to estimate first year cash flows for a new product. The C.F.O has collected the following information.
Product Development cost $500,000 and the initial cost of the Manufacuting Facility was $1 million.
Sales Revenues	$12 million
Operating costs (excl. depr)	$3 million
Depreciation	$1 million
Tax Rate	35%
Q1. What is the initial cost of the project?
Q2. What are the first year cash flows?
Q3. Mainely Snowboarding anticiaptes that the cash flows will remain constant for four years. If their WACC is 8%, what is the Net Present Value of the New Product?

Please provide the solution in Excel.