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-Majestic Mulch and Compost Co. (MMCC) is investigating the feasibility of a new line of power mulching tools aimed at the growing number of home composters. -The new power mulcher will be priced to sell at $120 per unit to start. When the competition catches up after three years, however, MMC anticipates that the price will drop to $110 -The power mulcher project will require $20,000 in Net Working Capital (NWC) at the start. Subsequently, total net working capital at the end of each year will be about 15% of sales for that year. -It will cost about $800,000 to buy the equipment necessary to begin production. It will have an 8 -year depcreciable life (see depreciation schedule). The equipment will have a salvage value of 20% of its cost after 8 years. This salvage value will be subject to a 34% tax. -The relevant taxrate for this whole analysis is 34% and the relevant required return is 15%. - Variable costs per unit are $60 and fixed costs per year are $25,000. Projected cash flows, power mulcher project 24 II. Net Worloing Capital Iit. Capital Spending 32. Initial outlay 5(800,000) 33 Aftertax salvage Projected cash flows, power mulcher project