A firm considers investing in a project. A consultant has made the following table of project-specific forecasts for years 1 through 5:

Forecasts in MUSD	Year 1-5
sales	104
costs of goods sold and operating expenses	28
selling,general and administrative costs	25
NWC	4
Marginal tax rate	30%

The initial investment in machinery at the end of year 0 is 100 MUSD. That investment is depreciated straight-line to a residual value of zero over 5 years. The change in NWC in year 0 is -4 and 4 in year 6. The cost of capital for the project is 10%. The consultant will be paid 0.1 MUSD for the project-specific forecasts at the end of year 1.

a) What is the firm's unlevered net income after tax in year 2?

b) What is the firm's free cash flow in year 2?

c) Should the firm invest in the project?

d) What is the project payback period? If the firm used the payback rule,under what prespecified length of time in years would the firm accept the project?