= 6. Your boss has asked you to analyze a new project. You estimate that the project will generate a cash flow of $3 million in one year. The cash flow is then expected to grow at 25% per year for the next 5 years (from t 1 to t = 2, from t = 2 to t = 3, from t 3 tot 4, from t = 4 to t = 5 and from t = 5 to t = 6) and to remain constant, equal to the cash flow in year 6, forever after that. The cost of capital is 12%. = = a. Draw the timeline, showing the cash flows at t = 1, 2, 3, 4, 5, 6, 7 and 8. b. Suppose the firm requires an IRR of at least 18% for each project it invests in. What is the maximum amount that the firm would invest in the project today (t = 0) in order to meet the 18% IRR target? c. Suppose the firm invests the amount calculated in part b. i. What is the NPV of the project? ii. What is the Profitability Index for the project?