Answer the following with all explanations, show formulas in excel for tables.

Capital Budgeting Analysis: A firm plans to produce and sell a new product for five years. First year sales of this product are expected to be 200,000 units and sales are expected to grow at 3.5% per year for years 2 and 3 and then at 4% for years 4 and 5. The selling price per unit of the product is $50 and variable operating costs are 48 percent of sales. The product will have fixed operating costs of $850,000 a year for the first 3 years and then $900,000 per year for the last two years. The firm will also need to purchase some new equipment for $8 million in order to produce this product. This equipment has a five- year life and salvage value of $5.2 million. The firm expects to be able to sell some old equipment for $1.2 million today (with no depreciation or tax effects on this sale). Depreciation is straight-line and the firms tax-rate is 25%. The new equipment that is purchased will be financed by borrowing the $8 million at a rate of 7.9% per year. Test marketing costs of $400,000 for the new product were incurred over the past two months. The new product is also expected to reduce sales of one of the firms existing products by $520,000 per year. The required return on the investment is 9 percent. Any annual working capital can be ignored. Required:

Set up a data table and then calculate the expected cash flows for the project.