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AAA Corp.currently has one product, high-priced lawn mowers, AAA Corp. has decided to sell a new line of medium-priced lawn mowers. The building and machinery

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AAA Corp.currently has one product, high-priced lawn mowers, AAA Corp. has decided to sell a new line of medium-priced lawn mowers. The building and machinery for producing this new line is estimated to cost $11,000,000 and it will be depreciated down to zero over 30 years using straight-line depreciation. Also, an investment today on working capital in the amount of $3,000,000 is needed. The working capital will be recovered at the end of the project Sales for the new line of lawn mowers are estimated at $18 million a year. Annual variable costs are 60% of sales. The project is expected to last 5 years. In addition to the production variable costs, the fixed costs each year will be $2,000,000. The company has spent $1,500,000 in a marketing study that determined the company will lose $12 million in sales a year of its existing high-priced lawn mowers. The production variable cost of these sales is $10 million a year. It is expected that at the end of the project, the building and machinery can be sold for $2,000,000. The tax rate is 20 percent and the cost of capital is 12% a. What is the initial outlay (10) for this project? The Initial Outlay is $(Round your answer to the nearest dollar - no decimals and commes are required to separate thousands and millions. Use negative sign for negative cash flows - do not use parenthesis) b. What is the operating cash flows (OCF) for each of the years for this project? The OCF for each year of the project are $(Round your answer to the nearest doller - no decimals - and commas are required to separate thousands and millions) c. What is the termination valuo (TV) cash flow (aka recovery cost or after-tax salvage value, or liquidation value of the assets) at the end of the project? The termination value at the end of the project is $(Round your answer to two the nearest dollar - no decimals - and commes are required to separate thousands and millions) d. What is the NPV of this project? The NPV of this project is $2,702,790 (Round your answer to the nearest doller - no decimals and commes are required to separate thousands and millions Use negative sign for negative cash flows do not use parenthesis) ols

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