Based on the following information for Project X, should we undertake the venture? To answer, first prepare a pro forma income statement for each year. Next calculate operating cash flow Finish the problem by determining total cash flow and then calculating NPV assuming a 28 percent required return. Lululemon is going to start selling a new skin massager. With this new skin care massager we project that Lululemon can sell 10,000 for each year. It will be sold at $100 for each skin massager. This product will have a 4 year life. The cost of each sale will be approximately $70 a year for shelf space, advertisement, maintenance, and other goods that are to be considered. Depreciation for year 1 is 10%, depreciation for year 2 is 13%, year 3 is 14% and year 4 is 12% We will invest 1,120,000 in producing manufacturing equipment. In 3 years this product will be worth half of what we paid for it. We will have to invest $1,200,000 in the net working capital at the start, after that, net working capital requirements will be 25% of sales. The tax rate is 21%