Exercise 7.2: (10 pts) The following expenses and revenues have been estimated for a new project: Revenues from sales $4,100,000 per year Cost of manufacturing (excluding depreciation)- $1,900,000 per year Taxation rate = 25% Fixed capital investment $7,700,000 o Two payments of $5,000,000 and $2,700,000 at the end of years 1 and 2, respectively Startup at the end of year 2 Working capital $2,000,000 at the end of year 2 Land cost $800,000 at the beginning of the project time (time 0) Project life (for economic evaluation) 10 years after startup Estimate the NPV for this project assuming an after-tax internal hurdle rate (interest rate) of 11% per year, using the following depreciation schedules: a) MACRS method for 5 years b) Straight-line depreciation with an equipment life (for depreciation) of 9.5 yrs The 5-year MACRS depreciation schedule is (Year Depreciation Allowance): I-20.00%, 2-32.00%, 3-19.20%, 4-1 1.52%, 5-11.52%, 6-5.76%