32- Which of the following is/are generally least subject to forecasting risk?

I. Projected sales

II. Initial investment

III. Projected fixed costs

A) I only

B) II only

C) III only

D) I and II only

E) I, II and III

35- The managers of XYZ Inc. plan to manufacture semi-conductors for cars. They expect to sell 200 semi-conductors annually for the next five years. The initial investment will cost a total of $800,000 and will be depreciated using the MACRS three-year class. The firm expects to be able to sell the manufacturing equipment for $200,000 at the end of the project. Labour and materials costs total $500 per semi-conductors, fixed costs are $125,000 per year and auto plants will pay $3,000 retail per semi-conductors. Assume a 35% tax rate and a 12% discount rate. What is the cash flow for the project in year 1?

A) $97,500

B) $449,432

C) $337,074

D) $203,996

E) $418,324