3. A proposed investment has a cost of $1000. It will have a life of 4 years. The cost will be depreciated straight-line to a 400 salvage value, and will be worth $440 at that time. The firm will also need to invest $250 in net working capital at year 0, to be recovered at the end of the project. Cash sales will be $620 in year 1 and cash costs will run $270 in year 1. Production costs will increase at 6% per year. Sales will increase at 7% per year. The corporate tax rate is 20%. The project is financed entirely with equity and the cost of equity is 9%. (15 points) a. Determine the cash flows during the life of the project. Show your calculations to get credit. (10 points) b. What is the NPV of the project? Is the project acceptable? (5 points)