$($ Calculating free cash flows$)$ you are considering new elliptical trainers and you feel you can sell $5000$ of these per year for five years after which time is project is expected to shut down when it is learned that being fit is unhealthy the elliptical train will sell for $$1800$ each and have a variable cost of $$900$ each annual fix cost associated with production would be $$1\mathrm{.}2$ million in addition, there would be a $$3$ million initial expenditure associated with the purchase of new production equipment is assumed that this initial expenditure will be depreciated using the simplified straight line method down to zero over five years. This project will also require a one time initial investment of $$1\mathrm{.}3$ million in networking capital as associated with inventory and that working capital investment will be recovered when the project is shut downfinally assume that the firms marginal tax rate is $33\%.$

A$)$ What is the initial outlet with this project

B$)$ what are the annual free cash flows associated with this project for years one through four?

C$)$ What is the terminal cash flow in year five $($that is what is the free cash flow plus additional cash flow associated with the termination of the project$)?$

D$)$ What is the project NPV given required rate of return of $11\%$

is shut down. Finally, assume that the firm's marginal tax rate is $33$ percent.

a$.$ What is the initial outlay associated with this project?

b$.$ What are the annual free cash flows associated with this project for years $1$ through $4?$

c$.$ What is the terminal cash flow in year $5($that is$,$ what is the free cash flow in year $5$ plus any additional cash flows associated with the termination of the project$)?$

d$.$ What is the project's NPV given a required rate of return of $11$ percent?

a$.$ What is the initial outlay associated with this project?

$($Round to the nearest dollar$\_)$

b$.$ What are the annual free cash flows associated with this project for years $1$ through $4($note that the cash flows for years $1$ through $4$ are equal$)?$

$($Round to the nearest dollar.$)$

c$.$ What is the terminal cash flow in year $5($that is$,$ what is the free cash flow in year $5$ plus any additional cash flows associated with the termination of the project$)?$

$($Round to the nearest dollar$)$

d$.$ What is the project's NPV given a required rate of return of $11$ percent?

$($Round to the nearest dollar.$)$