2. Prepare a capital Budgeting Desition for a firm in the 34% marginal tax bracket with a 45% of required rate of return or cost of capital. The project we are considering involves the introduction of a new electronic scooter line by Raymobile. - Cost of new plant and equipment: $97,000 - Shipping and installation cost: $3,000 - Unit Sales: Year Unit sold 123455,00010,00010,0007,0005,000 - Sales price per unit: $25/ unit in year 14,$30/ unit in year 5 - Variable cost per unit: $8/ unit - Annual fixed costs: $50,000 - Working Capital Requirement: There will be an initial working capital requirement of $10,000 just to get production started. Then, for each year, the total investment in NWC will be equal to 10% of the dollar value of sales for that year.. Finally, all working capital is liquidated at the termination of the project at the end of year 5 . - The Depretiation Method: We used the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years. Given the following information, a) Determine the free cash flows associated with the project, b) Calculate and comment on the project's NPV? c) Calculate and comment on the project's Discounted Payback Period