Company XYZ is exploring the expansion into a new market with its most popular product, widgets. It would like to explore this opportunity applying a 4-year horizon. Market research performed last year, at a cost of $65,000, indicates that annual sales would likely consist of 50,000 widgets in year 1 and increase annually by 20% per year. Widgets will be priced at $27 each. The move into the new market will necessitate additional P,P\&E (all depreciable) of \$1 million. Additional working capital for inventory needed is believed to be $40,000. Depreciation will be based on the MACRS 3 -year class (33\%, 45\%,15\%, 7\%). The project's estimated economic life is four years and at the end of this time would likely have a market value of $150,000. The production department has estimated that variable manufacturing costs would be $15 per unit in year 1. Fixed overhead costs, excluding depreciation, would be $215,000 a year. Unit variable costs are assumed to rise by 8% per year (years 24 ) while the price per unit will remain flat at $27/ ea. Total fixed cost is assumed flat. XYZ 's marginal federal-plus-state tax rate is 40% and its' cost of capital is 12%. a) Find the initial (year 0 ) cash outlay. b) Identify year 1 through 4 annual depreciation expense as well as equipment book values. c) In good form, share year 1 through 4 operating cash flows. d) Identify total cash flow (=OCF + terminal CF) in year 4 . e) Find NPV and address the question of whether the project should be pursued