Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects ear Sales (Revenues) 100,000 100,000 100,000 Cost of Goods Sold (50% of Sales) 0,000 0,000 0,000 The com pany's marginal tax rate is 35%. The equipment needed would cost $90,000 right now and investments into working capital is expected to increase by $5,000 immediately. The machine will be depreciated using 4 year MACRS. Assume that the machine will be sold for $10,000 at the end of year 3 and the working capital investments can be recovered at the end of the project as well. Year 2 Depreciation 33.33 44.45 14.81 7.41 30. Estimate the free cash flows for the project (16 points) ear Sales (Revenues Cost of Goods Sold (50% of Sales epreciation BIT axes nlevered Net Income epreciation orking Capital urchase of the machine Salvage Value et Free Cash Flow 31. Calculate NPV and IRR (4 points)