Based on the increasing theft rate in Sunset Harbor, the Harbor is planning to upgrade its security system. It is a 4 year-period project and will significantly increase Sunset Harbor's security level. The financial data is as follows: Investment: $45,000 O 50% debt equity ratio. Loan ($22,500) borrowed at 6% interest. Project life: 4 years Salvage value: $8,000 O Year 0 dollars Depreciation method: 3-year MACRS Income tax rate: 25% Annual Saving: $28,000 O Year 0 dollars Annual Expense: $14,000 O Year 0 dollars O O Does NOT include depreciation Does NOT include interest Market interest rate (i): 7%. If the general inflation rate (effects revenues, expenses, salvage value) during the next 4 years is expected to be 2% annually: a. Develop the income statement for the project. b. Develop the cash flow statement for the project. (Hint: Don't forget the Financing Activities) C. Determine the PW of the project. Is the project economically viable? Why? [ (Hint: Cash flows in Actual dollars, given market interest rate. Therefore, no need to convert to constant dollars before calculating PW)