(Calculating cash flows - comprehensive problem)The C Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return or discount rate of 12 percent, is considering a new project. This project involves the introduction of a new product. This project is expected to last 5 years and then, because this is somewhat of a fad product, it will be terminated. Given the following information, determine the net cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria.

Variable Value Initial capital expenditure $178,000,000 Shipping and installation costs $1,800,000 Life of the initial expenditure 5 years Salvage value $0 Marginal tax rate 32% Discount rate 12% Net working capital 11% of sales Net working capital investment $2,100,000 Fixed costs per year $12,000,000 Sales price in years 1 through 4 $700 per unit Sales price in year 5 $500 per unit Variable cost of product $450 per unit

Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years. $178,000,000 Shipping and installation costs: $1,800,000 Unit sales: Year Units Sold 1 1,300,000 2 1,700,000 3 1,700,000 4 1,100,000 5 1,000,000 Sales price per unit: $700/unit in years 1 through 4, $500/unit in year 5 Variable cost per unit: $450/unit Annual fixed costs: $12,000,000 Working-capital requirements: There will be an initial working capital requirement of $2,100,000 to get production started. For each year, the total investment in net working capital will be equal to 11 percent of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3, then decrease in year 4. Finally, all working capital is liquidated at the termination of the project at the end of year 5. The depreciation method: Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years.

(Calculating cash flowscomprehensive problem) The C Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return or discount rate of 12 percent, is considering a new project. This project involves the introduction of a new product. This project is expected to last 5 years and then, because this is somewhat of a fad product, it will be terminated. Given the following information, e, determine the net cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria. a. Determine the free cash flows associated with the project. The FCF in year 0 is $ 181900000 . (Round to the nearest dollar.)