Aluminum Inc. is about to launch a new range of aluminum chairs, priced at $$125$ per unit. The unit cost of the stoves is $$80.$ The firm expects to sell the chairs over the next $5$ years. The venture will require an initial investment in plant and equipment of $$50,000.$ Assume that the investment will be in an asset class with a CCA rate of $20\%.$ At the end of $5$ years, the project ends; plant and equipment will have a zero salvage value and Aluminum Inc. will continue to have other assets in this asset class. Sales projections for the aluminum chairs are as follows:

Year

Unit Sales

$1$

$340$

$2$

$390$

$3$

$430$

$4$

$520$

$5$

$560$

The net working capital requirement $($including the initial working capital needed in year $0)$ is expected to be $15\%$ of the following year's sales. The firm's tax rate is $34\%$ and the discount rate is $16\%.($You can write your answers in a piece of paper and scan it$,$ type your answers in a word document or solve the question using an excel spreadsheet. Your answers should be attached to this question$)$

a$.$ What is the investment in net working capital at the beginning of each year over the life of the project? $($You may use a table to show your calculations$)[5$ marks$]$

b$.$ What are the operating cash$-$flows $($excluding CCA$)$ in years $1$ to $5?($You may use a table to show your calculations$)[10$ marks$]$

c$.$ What is the PV$($CCATS$)$ from the investment? $[5$ marks$]$

d$.$ What is the NPV of this project? Should the firm undertake this project or not? $($You may use a table to show your calculations$)[10$ marks$]$