6. XYZ, co. considers a new project. The machine required for the project costs $6 million. The sales are forecasted to be $2.5 million per year for the next four years. The machine will be depreciated to zero over its four-year life using the straight-line method. Costs related to the project will be 35 percent of sales. Company also needs net working capital of $250,000 immediately. Net working capital will be recovered in full at the end of the project's life. The corporate tax rate is 35 percent. The required rate of return is 16 percent. Should company proceed with the project? 7. ABC, co. is considering the purchase of a $12,000 equipment. The equipment has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,700 items of product per year, with each costing $2.6 to make and priced at $5.1. Assume that the discount rate is 12 percent and the tax rate is 34 percent. What is an operating cash flow for year 1? 8. If investors require a 12 percent real rate of return, and the inflation rate is 10 percent, what must be the nominal rate